What is a buyback of LP tokens in the context of defi and what are it's advantages and disadvantages?
A buyback of LP tokens in the context of DeFi is an offer to buy (usually by project team) all or a pre-set amount of liquidity pool tokens (the tokens received after providing liquidity to Dexes such as Uniswap) for a certain token pair from the community.
Some of the advantages are the gas savings (assuming the buyer intends to maintain the liquidity), and allowing the community to sell their tokens without impacting the token market liquidity/price/
Some of the disadvantages are pricing of the LP tokens since crypto tokens are volatile and LP tokens are typically exposed to impermanent loss, it can challenging to set and maintain a fair buyback price. Also, such a program, while adding stability to the liquidity pool, would not by itself increase liquidity. The buybacks funds could have been used, for example, to add more liquidity to the pool.