Fluid Growth Vision & Community Buyback Discussion

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I wanted to contribute a perspective to the ongoing discussion around the community buyback program, as I believe there’s a related problem that deserves attention which is the current state of $fluid on-chain order book liquidity.

The Problem

Right now, the FLUID token’s order book liquidity is not reflective of the blue-chip status that Fluid has grown into. The token remains relatively volatile, and its on-chain order books show significant short-term downside risk.

While I personally hold FLUID with a long-term mindset, I see two strong reasons why stabilizing its price and reducing downside volatility is important:

  1. Trust and perception – Token prices have a psychological impact on market participants. A stable and liquid market inspires confidence.

  2. Capital efficiency for growth – Fluid’s moat comes from deep liquidity in the liquidity layer that powers primitives like Smart Debt, traditional borrowing, and other future credit products. The more lenders contribute tokens to this layer, the stronger this moat becomes. A healthier token price makes incentives more effective, as a fixed number of tokens can attract more liquidity.

Improving the buy side of the order book

Currently, the buy-side is extremely thin, only around ~25 ETH of buy-side liquidity sits in the two main Uniswap pools.

Instead of using buybacks to market buy tokens, I propose directing buyback funds toward placing resting bid liquidity, for example, limit buy orders ~5% below spot. Practically, this could be done by the Fluid team every two weeks, alling a percentage of protocol revenue to these bids.

This has two benefits:

  • It builds visible buy-side depth, increasing market confidence and attracting new buyers.

  • It allows the DAO to acquire tokens at more favorable prices from sellers compared to market buying from them.

Improving Sell side order book by turning fluid into a yield bearing asset

On the sell side, liquidity is also thin in terms of slippage, even if the notional size in the Uniswap pool appears large (i think this is currently provided by the team but not sure).

One way to improve this sustainably could be to spin up liquidity using EulerSwap, which I believe is well-suited for long-tail asset markets.(if you want to better understand EulerSwap you can read this https://x.com/letsgetonchain/status/1966095252822847924).

A possible setup:

  • Deploy two vaults: one for FLUID and one escrow-only vault for stETH.

  • The Fluid team supplies stETH to the escrow vault.

  • The community supplies FLUID tokens to the FLUID vault.

  • The team runs a just-in-time EulerSwap market that provides one sided from the FLUID vault, just in time borrowing FLUID against the stETH collateral.

This design has several benefits:

  • FLUID holders earn lending yield on their tokens.

  • The team earns trading fees from the EulerSwap pool.

  • Borrowing costs and the short FLUID exposure the FLuid DAO would bee exposed in case of FLUID price token rise would be naturally hedged by the DAO’s large treasury of FLUID.

  • It would be very easy to execute and not divert core team resources away from revenue-generating products (as this can be configured via Euler’s UI using audited code).

Minimal Operational Overhead

Operationally, this would be light-touch:

  • Every two weeks, adjust the Uniswap bids as part of the buyback strategy.

  • Configure and maintain the sell-side EulerSwap operator.

I see this as a way to align the buyback program with a broader liquidity vision which makes the FLUID market more resilient and attracts new participants.

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