Imo time in lp should still be explored. But move a bigger portion of lp fee into the treasury, just like paying a premium for insurance but instead, premium is paid on every trades.
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At the moment every LP pays a premium when trades are made in their pool, that was used for mitigation of BNT minting for ILP
Yes the collected premium (trading fee) can be used to pay out for ILP instead of minting more bnt. But of course it will take time
Im giving this thread a boost. We need more community feedback around solutions that will repair the damage done and improve bancor as a whole. adding additional features to the bnt token, if implemented well, can give a HUGE boost to public awareness, buy pressure on the bnt token and will reduce the deficit. lets go bancor fam and lets hear your ideas. if your idea is good, then ill add it to the thread post so it will be more visible
There is a similar proposal that was posted this week here:
glenn, are you aware of the team considering adding any additional features to the bnt token that might help drive up organic buying?
New idea for the bnt token ( 1 idea includes bullet 1-4 ā¦ 5 is optional )
- ILP insurance is restored, but is acrued at ā%/day + requires a the LP to stake X ___ BNT tokens ( depending on the size of the position ? )
- in addition to this staking the BNT tokens will also entitle the BNT LP to a % of the withdraw fees or a % of the fees generated from trades )( withdraw fees could come from IL from user not having full coverageā¦ or a fee taken from a users position for exiting )
- If the users initiates ILP , their staked BNT is locked for X__ period of time and no longer accrues any of the withdraw fees or trading fees during this period of time ( making the bnt token more beneficial for those who arent exercising their rights to ILP )
- Only BNT that is staked, while there has been no claim for ILP will be issued withdraw fees or fees generated. ( this creates buy pressure for bnt, and helps to lock up bnt )
- ( this next idea doesnt need to be implemented, but if we increase the APY for LPāing the BNT pool ONLY with additional bnt similar to v2.1 then this may also boost the desire for people to purchase the bnt tokenā¦ of course this will mean increasing the supply of bnt so Iām not stuck on this bullet pointā¦ just noteworthy that a high apy for taking on the risk for buying and staking bnt may incentivize organic growth )
( can some big brains here do the some math behind this idea to see if its logical? ) this will add buy pressure to the BNT tokenā¦ if the fees generated for long term bnt holders from withdrawals are high enough, this will incentivize long term users of the platform and will pump the price of bnt. and when users excercise their rights to ILP this locks up BNTā¦ I feel this is a win for organic buying from investors who want the fees, a win for organic buying from users who want the ILP and a win for the protocol as this mechanism also locks up BNT @yudi @mbr @ZenoBNT @foxsteven @glenn @thedavidmeister tagging you guys to get your attention on this idea.
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cross posting from the other thread:
i think the main thing iād say is that if weāre healing the deficit then thatās the same as having ILP being restored at some rate per day already
if thereās no deficit there is no āILā to āprotectā, prevention is better than cure as they say
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Definitely some ideas worth thinking about here. Going to chew on them for a while 
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how would you suggest getting to a point where there is no deficit?
i have several ideas that all require simulations and research
current line of investigation is over here Proposal: Limit on-curve liquidity to max(520 x 7 day fees, 100k BNT)
Well with regards to the suggestion that I made above,
at some point bancor will need to reinstate ILP, however ILP in its current form needs to be adjusted to something more anti fragile. ILP was THE main selling point to many for using bancorā¦ repairing the damage done also includes fixing ILP in addition to the deficit
With the changes that I suggested it would;
- increase organic buy pressure for the bnt token which would lead to a stronger BNT and a lower deficit . users need it for ILP, investors want it for the fee accrual. a higher bnt price from organic growth would lower the deficit, and bring in new users, and incentivize hodling
- it would reinstate ILP which is what bancor is known for
- it would lock up portions of bnt from the open market for a period of time when ILP are making their claim
- it would only share the fee accrual gains with users who are not within the process of making an ILP gain, therefor making the bnt token even more valuable to long term users
now if you pair a stronger more valuable BNT token along side the addition of revenue generation on the platform sideā¦ then I am strongly suggesting that this will make a much more attractive and desirable platform
Very interesting idea.
Iām a big fan of the protection mechanism and would like to see it in one form or the other (sustainable form of course) being re-introduced into the platform.
LPs staking for protection is one way to achieve it but the devil is in the details, this needs more modelling. I do like the general idea though, I think itās a good baseline.
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Check out reverse Dutch auctions - this is essentially what you are describing and something I have discussed with others. Generally, the consensus is that this solution just doesnāt work. Furthermore, I believe that no solutions will work unless they involve a new fee generating mechanism. The situation the protocol is in isnāt a āpuzzleā in which all of the pieces exist and simply need to be re-arranged to find the optimal outcome - this is a āproblemā in which exogenous funds need to be added for a solution.
I discuss the issue of the need for more revenue in this video (which has already been posted elsewhere and you may have already seen).
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I agree that revenue generation is probably the main priority
but dont you feel that we need a way to incentivize organic growth of the bnt token . I dont think buyers will step in and take on the risk, even after the dust has settled, for the bnt apy %
and a reverse dutch auction is pretty different.
this idea is more akin to other blockchain insurance projects which require you to buy their tkns in order to receive insurance protection
maybe instead of some indirect route like staking we simply charge an annual premium for the ILP insurance directly based on the inputs/outputs of the new simulator for that TKN
ILP has always been given out for freeā¦ well it was given out based on the length of time from the LPā¦
if bancor starts charging a fee for ILP, it will cause a stink, however if we throw in additional use cases like what I suggested, then that will help to offset the downside of paying for ILP
Im trying to add additional benefits for holding and buying the bnt token, rather than it simply only being a purchase for insurance ( which they should get the funds back after a certain period of time )
yeah i hear you, i like the idea of insurance existing as a paid/premium/exclusive/qualified thing somehow
iām ok with an initial stink if it means we end up with a sustainable and manageable product, because in the end people really like things that clearly make them money
the thing about a premium is that it is easier to calculate, we can get data on a TKN volatility and feed that into a premium
pragmatically i donāt know how to quantify a stake amount that justifies some random TKN asking for ILP on a DAO proposal, i actually think weād just fuck up the risk analysis like we did with LMR 
Itās an interesting question. If the ILP was limited to fees generates by the staked BNT (and any potential withdrawal fees) then there isnāt too much risk on the protocol, but I do think we need more fee generating features to make this attractive.
what i was thinking was something like:
- we use data and our simulator to come up with some e.g. 90% confidence that TKN wouldnāt exceed 5% IL vs. BNT over 1 year
- we offer ILP at e.g. 7%
- each year we subtract 7% from the staking ledger of anyone who opts in
if we were wrong and TKN had 10% IL then we pay 3% ILP
if TKN had 5% IL as we expected then the 2% difference between the deficit that user would have seen anyway and the ILP premium is given up to help cover everyone elseās deficit
the 2% cost to the ILP holder becomes revenue for everyone else
seems like it would not be so difficult to do as a hybrid of the rewards and ILP contracts
the difficult bit would be the modelling and projections, i think it would only be possible on whitelisted TKN that have been through a specific risk analysis process, and we also have to be confident that the token price is resistant to manipulation by policy holders
the good thing is that we could hire an actuary to do this modelling, as it aligns with how insurance works everywhere else so probably a lot of their skills apply here
iām seeing this as something that might be attractive to people who want liquidity for their token, e.g. treasury management, and want single sided staking (donāt want to sell TKN to make 2-sided) and want to be able to budget (volatility on the ILP premium would be lower than volatility in the TKN price)