Buyback & burn
Growing a coin's hedge is half the point. The other half is getting the hedge's gains to the people holding the coin.
Adding depth doesn't do that. Depth sits below the price and makes the coin more robust, but it doesn't move the mark — a holder watching the chart sees nothing. So when the perp actually makes money, the protocol does something visible instead.
What happens
The keeper detects a real gain on the perp, redeems that slice of the coin's backing LT for USDG and then WETH, and market-buys the coin on its own pool. That walks the price up: it's an ordinary buy, funded by the underlying's performance. A configurable share of what it bought is burned to a dead address, permanently reducing supply, and whatever isn't burned is redeployed as pool depth — protocol-owned and recyclable.
The design choices
It buys on the coin's own pool rather than from a treasury. The buy is a real trade against real liquidity, with no special path and no privileged price, which is what makes it move the mark.
Only realized gains get spent. The principal backing is never touched — a coin can't buy back its way into an undercapitalized hedge. The trigger reads the oracle's signed hedge equity against deployed principal, not vault NAV: NAV moved on margin recalls and used to fire false burns on every recall, which is a bug the current version doesn't have. With no live hedge data the planner returns nothing rather than guessing.
It burns a share, not everything. Burning 100% would be maximally deflationary and maximally wasteful — that capital leaves the system forever. Keeping part of the bought supply as protocol-owned depth means the same dollar can work again: support the price now, be recycled later. The burn share is tunable (burnBps); at 0 the operation is fully reversible, at 10000 everything is destroyed.
It has a minimum size. A stream of tiny buy-and-burns clutters the chart, costs more in gas and slippage than it delivers, and reads to holders like something is wrong.
What it is not
A buyback fires only when the perp is genuinely in profit, so a coin whose underlying is going against it won't see one. The mechanism transmits gains rather than creating them, and it isn't a price floor.
It's also not a redemption. You can't exchange a coin for its share of the hedge. The hedge reaches you through the price, not through a claim you can exercise.
The platform fee side
Separately from per-coin buybacks, the protocol's half of every trading fee — 0.5% of every swap — accumulates in WETH across all coins as one protocol-level pot (platformFeesWeth), used to buy PERP, the platform token, and burn all of it. Every coin that trades feeds it, whichever way its own bet goes. See PERP, the platform token.
buybackAndBurn(meme, ltToRedeem, minMemeBought, burnBps) is onlyKeeper and reentrancy-guarded. It reverts InsufficientBacking if ltToRedeem exceeds backingLtShares[meme], so a buyback can never spend backing the coin doesn't own, and that balance is decremented before any external call. The path is LTVault.redeem → USDG → WETH on the V3 router → market buy on the coin's V4 pool with minMemeBought protecting the leg. memeBurned = memeBought * burnBps / 10000 goes to 0x…dEaD; the remainder is reseeded single-sided. Sizing lives in plan_buyback() in keeper/hood10l/single_harvest.py.