The following are my early thoughts on a proposal to initiate a MELT buyback/burn mechanism to create regular upward pressure on the price of MELT:
Those that were around during the vote to change the MELT/AVAX rewards from USDC to MELT know how adamantly against this I was, particularly due to the fact that we were essentially removing buy pressure on MELT by not distributing the USDC.
Im not sure the exact amount of stability fees collected, so Im going to use the info from when USDC was being rewarded to LPers as a placeholder. At that time it amounted to around $20k, I believe.
If $20k was used to purchase MELT, it would net around 33k MELT at current price and create positive price pressure. Then, if burned, we just increased our total MELT burned by 30% instantly. This would create an increase on price several fold over just buying MELT, and it would in large part be a sustained increase since the burn is cumulative and irreversible. This could be done once, or repeated monthly. It could use a portion or all of the stability fees.
While I know there is an argument about the effect this would have being insubstantial, I would vehemently argue otherwise. Aside from the actual act of buying, increasing the rate of burn by this amount (a rate which increases as price decreases since more MELT can be bought for lower price) it would have profound effects on the price of the token, not only instantly, but cumulatively as we see a constant upward price pressure by the continual burning of coins.