⁤Buyback &⁤ LP

How protocol revenue is used to buy back tokens and strengthen liquidity pools.

Historically, token buyback and burn strategies have effectively increased token prices and scarcity. With the rise of Decentralized Finance (DeFi) and Automated Market Makers (AMM) like UniSwap, a new strategy combines these benefits with deeper liquidity: Buyback & Liquidity Provision.

How It Works:

• Instead of burning tokens, they are used to increase liquidity on the primary AMM market.

• The resulting liquidity provider (LP) tokens are stored in the project's treasury, combining reduced token supply with increased liquidity.

🔄 Buyback & LP

Dual-Purpose Buyback Model

Clutch uses an innovative approach that serves two critical functions:

1. Reward Replenishment

When the rewards pool needs refilling:

• Protocol revenue buys back $CLUTCH from open market

• Tokens reallocated directly to player rewards

• Boosts emission strength without minting new tokens

2. Liquidity Support

When reward pool is sufficiently stocked:

• Buybacks add liquidity to key trading pairs

• Ensures stable, deep market across DEXs and CEXs

• Reduces sell pressure and supports price stability

Buyback & LP Process

• Half of allocated funds ($31.50) buy $CLUTCH tokens

• Purchased $CLUTCH + equal USDC added as liquidity

• LP tokens stored in project treasury

• Creates deeper liquidity without burning tokens

Practical Example

Transaction Flow:

• User spends $700 on platform

• 30% platform fee collected ($210)

• If reward pool below threshold: 30% of fee ($63) replenishes rewards

• If reward pool above threshold: 30% of fee ($63) goes to Buyback & LP

• Remaining $147 funds platform operations

Conditions:

• Fees Subject to Buyback & LP: 30% of total revenue.

• Price Threshold: Buyback & LP are conducted only if the $CLUTCH token price is below a certain threshold (e.g., 3x initial price). If the price is above this threshold, funds are stored in the treasury until needed.