Yes, it locks away the vBNT of people that are providing liquidity in the vBNT pool (what you call long term holders) but also anyone that has leveraged their vBNT as well:
vBNT in the pool = vBNT staked by vBNT LPs + vBNT that has been sold (essentially leveraged)
assuming that the rate goes back to 1 or higher, I expect more selling of vBNT from people leveraging their vBNT. I guess this also means that the vBNT pool could go back into surplus in the future when this happens.
Is there a way to calculate how much of the vBNT from the pool beings to stakers, and how much belongs to vBNT which was leveraged?
I would assume its mostly from stakers, but hopefully some data could shed some light on this.
And if this is the case where its mostly from stakers ( long term holders ) then I stand firmly behind my point that further locking away their BNT is not helpful for the short term ( until the deficit is repaired ).
Repairing the deficit should be priority #1, and all actions currently taking place should be directed towards repairing the deficit in the fastest way possible. A direct burning of circulating BNT will have a greater impact in the short term.
The main issue is that there is a lot of BNT in the system. Create organic demand for BNT making new deposits having to buy BNT to stake. If the protocol print BNT with every deposit then that BNT is effectively for sell. People underestimate the damage of adding BNT to the pool hs done to the protocol. Adding liquidity = adding a sell order at a price range. Dilute the liquidity as much as possible or BNT won’t ever recover
If people buy BNT then stake it, the protocol does not print BNT my friend. Increasing organic demand and buy pressure will be good for bancor
Yeah I’m talking about single sided staking. It should be eliminated for new deposits.
What about this idea, if what you are saying is correct, then what bancor needs is for BNT to be purchased and removed from circulating supply, rather than BNT being purchased then lp’d
so what if we use the scenario I described in a previous post about BNT having additional features
- in order to qualify for ILP, BNT must be purchased and used in the protocol in order to qualify for ILP, and the amount of BNT will depend on the size of the position, similar to curve requiring staking crv for x period of time
** heres the kicker that removed BNT from circulation **
with the above example - when the individual buys BNT to qualify for ILP, this bnt is NOT staked in the BNT pool, but rather staked elsewhere that removes the BNT from circulation for x period of time
during this period of time where the BNT is locked away, the user should still receive some sort of benefit within the system for locking up their , BNT, however, if the user ever removes their liquidity and exercises their rights to ILP, the BNT is then locked away for a new period of time && this BNT will also no longer give the individual the benefits it did prior to exercising their rights to ILP
the benefit of locking up BNT in this particular pool could be … rights to ILP & trading fees
this will increase buy pressure for BNT and demand for BNT and will cause individuals to stake and lock away their bnt in order to earn trading fees & the rights to ILP. here bnt is effectively removed from circulating supply. if the user execute their rights to ILP, their BNT will no longer give them trading fees and will then be locked away for X period of time post ILP execution.
Im sure this idea can be tweaked out, but if bancor creates a new staking pool that is separate from the BNT that facilitates trades, then these BNT tokens are effectively bought and removed.
It doesn’t matter if BNT is added to LP. You get more tokens while BNT supply remains constant = higher BNT price. A BNT locking mechanism is indeed neccesary, though. We could even adapt this idea to current LP’s trapped with deficit. Make them buy and stake a proportional amount of BNT to be able to withdraw without deficit. You will create a virtuous cycle where the deficit will self correct
Unless Bancor team gives us details on how they plan to increase yield as a protocol, shouldn’t we just put a limit back on and restart from that safe point? Thorchain is literally a copied use case from bancor that is still working.
On top of that at this point perhaps the best way forward isn’t to be innovative on untested methods, but use what is known. Flash loans, actual loans, curve style voting etc.