Changes to the buyback logic

We have decided to simplify the burn calculation logic. Instead of burning and discounting on a per-ticket basis as we did previously. We now use the more general burn per state change metric. This means that for every state change, a certain amount of GET needs to be burned.

In the previous 3 buybacks we burned a ratio of the bought back GET. As this allowed us to set the net price for acquired GET to €0.50 / GET. Moving forward we are simplifying this by burning all acquired GET if the open market price is below €0.50.

Buyback for what you burn

Event organizers pay for the total amount of state changes of their tickets. Of course, there are still differences in the complexity of a ticket. These are now reflected in the number of state changes needed to service the average ticket during an event cycle.

Besides being a far simpler mechanism to operate and secure from a technical perspective, we have found this model to also fit far better to business needs as ticket holder behavior. If a lot of people end up reselling tickets, something is hard to predict beforehand, this approach allows the protocol to account for that as it happens.

TLDR: Event organizers pay per state change. All GET used in a state change is burned. Meaning that all GET that is bought back is burned.

Input about Q4:

Total state changes: 350 332

Average discount rate per state change in Q4: 42%

Undiscounted rate per state change (averaged for Q4): €0.07

Total events: 220 (+159 more events as Q3'19)

Organizer accounts added: +17 new organizer accounts

Calculation burn exchange buyback

Average price state change = (€0.07 * 58%) = €0.041 per state change

Total funds for buyback Q4= (350 332 * €0.041) = €14 363

Amount GET bought from open market = 57 710 GET

Making the average buyback price of GET for Q4: +-€0.25 -> this result we will carry to the discount burn calculation in the paragraph below.

Calculation burn discount

Discounted per statechange: (€0.07 * 42%) = €0.029

Total funds for discount = (350 332 * €0.029) = €10 159

GET needed from internal pools = €10 159 / €0.25(carried) = 40 638 GET

Total allocated to buyback = €14 363 + €10 159 = €24 522

Total GET burned = 57 710 + 40 638 = 98 348 GET

This calculation might seem long but it is rather straight forward. In bullet points it comes down to the following:

As long as GET traded below €0.50 on the open market, all GET bought back is burned for 100%.

All GET that is provided as a discount, is priced at the average acquisition price of GET. This portion of GET is burned for 100%.

Dynamic tracking & burning

Currently, we are burning GET after the fact(hence this report still being important). This isn’t an ideal situation as this process is inherently centralized and opaque. We are working on making the usage of the token integral and necessary to register a transparent and honest ticket on the blockchain.

This means that just like with Ethereums Gas, that GET will eventually be burned in real-time as tickets are processed. If an event organizer(EO) does not present proof of burn-in GET, a proposed state change will not be picked up by the ticket explorer and thereby not be valid.

In short, combining the ticket explorer and GET burn-proof feature, it will be possible for the open market to check each state change (or the ticket history) and verify on the blockchain how much GET is burned.