Protocol Driven Buybacks (PDS)

This page goes into detail about the protocol aims to conducts buybacks of RZR

Protocol-Driven Buybacks are a core part of Rezerve’s monetary strategy where the protocol actively purchases its own token (RZR) using yield it generates from onchain assets like ETH, BNB, SOL, and HYPE, or even borrowed stablecoins under specific conditions.

These aren’t just speculative pumps but they’re also calculated moves designed to shrink circulating supply, reinforce protocol-owned value, and increase the long-term scarcity of RZR.

The goal is not short-term price action, but to strengthen protocol-owned supply and protocol owned liquidity giving the system greater control and resilience over time.

When Do Buybacks Happen?

The protocol considers buybacks when it already has significant control over its own supply and liquidity. At that stage, buybacks become a rational strategy because they either:

• Allows the protocol to capture more supply directly, or

• Have little to no negative impact on its existing holdings.

In the ideal case, the protocol is trading in its own best interest, not for users. However, because the protocol and users are aligned, these actions ultimately benefit everyone. By consolidating more supply and liquidity into protocol ownership, the system becomes stronger, more sustainable, and more trustworthy.

There are two sources of funds that the protocol can tap into to perform buybacks

Borrowed USD Buybacks

At first glance, buying back tokens with borrowed stablecoins might appear risky. But when the protocol owns the majority of supply and liquidity, the downside is minimal. Any “leakage” from such a move translates into a small expected loss for the protocol, and a net gain for users.

In an ideal scenario, borrowed USD buybacks should only happen if and only if the protocols owns a very large majority of the supply and liquidity.

See the "Bank Run" risk.

Revenue-Driven Buybacks

This is the primary and most sustainable method. Rezerve continuously earns yield from staking its network token holdings ETH, BNB, SOL, and others across validator and DeFi layers. That real income is then recycled into automated or manual buybacks, effectively turning staking rewards into supply reduction.

Because this revenue is continually generated by the system, it creates a natural cycle where protocol earnings are recycled back into buybacks.

This approach is sustainable, self-funding, and flexible. It doesn’t depend on leverage or external capital, and it allows the protocol to scale buybacks alongside its own growth.

See Revenue Sources.

The Bigger Picture

Protocol Driven Buybacks represent a shift from reactive tokenomics to proactive system building. The protocol isn’t passively waiting for the market to decide its fate, it is actively shaping its own future, consolidating power where it makes sense, and ensuring that in the end, both the system and its users win together.