This proposal is expected to appear on Snapshot for voting on 2021-10-17T12:00:00Z. Make sure to stake your vBNT for voting before this date and time to participate in the DAO decision.
To pass, this proposal requires 35% quorum and 66.7% supermajority.
- The Vortex Burner rate was increased to 10% in the beginning of June , 4 months ago.
- Initial Vortex Burner rate schedule specified periodic incremental increases of 5% every 6 months .
- Bancor’s average APR wouldn’t decrease significantly with this change.
- The benefit to increasing the Vortex Burner rate is clear - increase the speed at which BNT liquidity is locked in the protocol forever. The projected vBNT burnt at 15% justifies the early increase.
The impact of changing the vBNT rate from 10% to 15% on the average APR for an LP can be assessed by analysing the APRs of the bigger pools in Bancor. The weekly average APRs for 89% of the TVL were accounted for, with the total average APR changing from 7.74%±0.85% to 7.275%±0.803% (Figure 1).
Figure 1 - Analysis of the Vortex Burner rate impact on the weekly average APRs for the major pools.
Accumulated vBNT burnt has followed a linear pattern with an R^2 of 0.9966 (Figure 2).
Figure 2 - Accumulated vBNT burnt since the 1st of June .
Assuming this linear pattern is maintained until the end of the year - when the vortex burner rate would have been increased to 15% as per the original Vortex Burner proposal  - 1.98m vBNT would have been burnt by then.
Increasing the rate to 15% from the 21st of October and assuming that the vBNT/BNT ratio remains constant would mean that, by the end of the year, 2.82m vBNT would have been burnt by then. This represents a 834k difference in burnt vBNT, or roughly $1.08m (with vBNT at $1.290).
- As expected, the vBNT/BNT ratio, as well as fees accrued by the protocol, are not constant and the former will be greatly affected by the increase in the Vortex Burner rate. However, increasing the vBNT burn rate should have a positive impact on the BNT/vBNT ratio as more vBNT is taken out of circulation.
- As of the 11th of October, roughly 2% of vBNT supply has been burnt.
- vBNT supply has been burnt at an average of 0.0151%/day since the 1st of June .
- For a better analysis on the impact of the burner on the average APRs, a higher % of the liquidity can be accounted for, and other metrics can be analysed, such as minimum APR and median APR.
Increase the Vortex Burner rate to 15%.
Keep the Vortex Burner rate at 10%.
 (BIP) Increase Vortex Burner to 10%
 (BIP9 ADDENDUM) The Bancor Vortex vBNT Burner: Proposal to Switch to a Flat Burn Rate
 Data collected from Dune Analytics