How ZEPH’s buyback mechanism works
Buybacks of the ZEPH token are a key mechanism for growth in the value of ZEPH. Our vision for ZEPH is that it allows customers and friends of Bitspark to participate in our growth by holding, using or earning it - either as a customer of our business, or as a referrer for our products.
Buybacks on the ZEPH token will commence on Wednesday, October 31st, 2018.
Buybacks on ZEPH are also a key metric for our own business, Bitspark: we use this figure as a gauge to measure the value we are creating in the world as a company, and seek constantly to grow this number.
The successful commencement of the buyback mechanic for ZEPH is the fulfilment of part of the investment case for our tokensale in 2017. Unlike so many projects from the same period, we are proud to be not only delivering functional products, but also keeping our word to our supporters.
In the spirit of transparency, we are laying out the terms upon which buybacks of the ZEPH token will occur so that the market surrounding our token operates as efficiently as possible.
It is important to note that the specific amount of buy-backs for ZEPH will vary month to month, as we are partly dependent on market conditions to determine this. In principle, however, you can expect buybacks to be:
- Consistent: we plan to release buybacks at a monthly schedule.
- Fair: buy-back orders will be placed at market prices on Sparkdex, our own decentralised exchange, so that as many people have access as possible.
How much will be the buybacks be?
The amount used to fund buy-backs equates to 25% of all commissions earned through Bitspark’s currency exchange products.
The volume used to calculate this funding comes from:
- Trading fees on Sparkdex, our decentralised exchange.
- Currency exchange for our business platform customers.
- Digital currency transactions from individual users through our mobile application.
Our exchange margins vary (~0.5-1%) depending on currency and particular markets and customers whereas the margins on the DEX are fixed at 25% of the existing trading fee (0.2%). Other commissions such as listing fees paid for new tokens on Sparkdex will not be included in the buybacks as these are already denominated in ZEPH.
How will ZEPH buybacks be released into the market?
In order to avoid market manipulation, buybacks of ZEPH happen throughout the month at random intervals up to the total amount of buybacks for that month determined by the previous months commissions. For example, if total commissions for the previous month was $10000 then $2500 would be bought back at random intervals in the following month.
The buybacks will be placed as a single order at market price on the most liquid market, which at the moment is BTS:ZEPH market. In future we intend buybacks will be done in the market in which the commissions were earned (for example sparkdex.BTC, sparkdex.HKD etc).
Commissions earned outside of Sparkdex (though our business platform or mobile application) will always have their buyback issued through the sparkdex.BTC:ZEPH or if insufficient, the most liquid market.
How will buybacks be announced?
Buy-backs will be announced generally on all of Bitspark’s channels, with notifications of the order placement being posted on the ZEPH telegram channel, and the Sparkdex telegram channel and twitter account. Reporting will take place after 100% of the months buybacks have been completed and will be made public.