To add, 3 days prior the account that moved the vBNT rate with a big trade from .25 to .5 removed all BNT liquidity in order to trade it for vBNT (probably in anticipation of this post)
I would agree, please take this more seriously
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Agree with @bias, appreciate the impartiality as always. We can speed up the process. That doesnât mean we should suddenly start burning 20% of swap fees.
If youâre actually interested in exploring the effects of increasing the swap fee, then I suggest a proposal to move the burn to 10% if you want to obtain any sort of support from the community. The burn would happen in 2.5 months anyways, so not that far away. I would welcome such a proposal.
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hey Tiago⌠I genuinely agree with this proposal and yes, it was flagged to me personally. so I am following it. Nothing illegal there, or to not be taken seriously. All my actions thus far have been serious! Promise.
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I was just stating facts, I didnât accuse anyone. Letâs discuss the proposal if youâre so supportive.
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Sure⌠Personally, this one classifies as very low risk.
We are going to increase the burn regardless, and see the comment above regarding other dexes/amms- this is in within range. And personally, I donât think the incremental 10% is worth it when you consider the LM costs stated above⌠If 20% is the end goal anyway, letâs get there.
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guys, cool down a bit.
currently aprs for the pools are high but this wasnt the case and wont be the case all the time. if anything i want to couple the burner fees to the total trading volume in relation to TVL, a.k.a.high aprs = high burner fees.
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For me, the key here is not that increasing burn is bad, itâs just that we canât increase it to 20% without any data. Just like the ETH pool fee increase, you need to do it incrementally. Maybe the right rate is 45%! We donât know until we test.
It seems like swap APYs (so far) have not had a noticeable effect on TVL. I think TVL is being driven by liquidity mining rewards and belief in Bancorâs potential.
Increasing the burn % will decrease APYs but I donât see any reason why that will seriously damage TVL while LM rewards are going, and burn % is unrelated to trading volume. The leverage properties of vBNT work better with a higher peg, and a higher burn % locks more BNT in the platform. Seems like a good idea to me.
We already had to move away from dynamic burn (tied to peg, not APR) due to gas issues, so unfortunately that wonât work.
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Rewards arenât sustainable. It causes a high rate of inflation. My understanding was that the motivation behind rewards was to bootstrap TVL, trading volumes, and, finally, trading fees. That will provide a sustainable solution for Bancor long term.
The transition from rewards to fees as payment for LPs should be a slow transition.
The only way fees jump up from one day to the next after rewards end is by having a ton of people unstake. That would cause TVL to tank and the volume alongside with it.
Many of us are long vBNT and underwater (thanks Simp), but we should be thinking about the best thing for Bancor long term, not our pockets short term.
There is no advantage to having vBNT = BNT other than getting people to sell their BNT for other tokens.
vBNT â BNT â tkn
Play the long game.
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I think staying on schedule is the right move here, but Iâd be fine with moving the fee up to 10% so that we could gauge itâs effect. I definitely do not think we should immediately bump the fee up to 20% at least not without some significant amount of data on what it would do to APRs. The argument that LM Rewards pays for this does not take into account pools that exist without them which is our core product. Also rewards have an incredibly high re-stake ratio which means theyâre doing exactly what they are supposed to do. They are expanding the supply while at the same time increasing the networks value by opening space on the other side of pools.
I would say that a closer peg increases its viability as a traditional overcollateralized loan, if vBNT was at a constant .8 for example that would put a lot of lending platforms to shame, (especially the no-liquidation part). If a rate like that could be sustained consistently weâd have people flooding in like crazy.
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I strongly counsel for a measured approach. Bancor is here for the long run, and many LPers are devising investment strategies around the protocol. In the long term we benefit from becoming an integral part of the DeFi landscape. vBNT leverage is clearly a popular offering of the protocol, and changing the rules ahead of time in a dramatic way could devalue the Bancor brand by derailing investment plans that are already in flight.
While I do think that the vBNT ratio is too low, which limits the extent of leverage and raises the risks associated with a dramatic rise in the ratio that could leave investors exposed. While this risk falls on their shoulders, we should not be another source of risk compounding the risks they have already taken in the expectation of a stable policy environment. In fact I think we owe it to the early adopters of the Vortex to provide them with a stable policy environment as they are also experimenting and working our the risks and advantages of the Vortex, as has been clear in some discussion on the community call. We all benefit as a community from wins and loses they make and share with us.
I advocate a slow-and-steady approach so that current and future LPers trust us with their tokens and we are not seen as fickle and money hungry. I think future LPers will benefit from higher leverage if the vBNT/BNT ratio rises but we should not put early adopters into the situation of a short-squeeze. The Vortex is an experimental product and I agree with bias that we do not know the correct setting, which will probably be dependent upon market conditions. We have only to wait another 2.5 months for the rate to rise to 10%. and we should be spending the current period carefully observing and watching what happens under changing market conditions.
In summary, I think the risks to our brand by raising the burn % prematurely far outweigh the benefits, and I will be voting against any change in the burn schedule.
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As someone who sold 6 figures of vBNT, I knew the risks and the dynamic nature of governance. This proposal is the right thing for the whole ecosystem.
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I think the fair move (if any move at all) would be a much less dramatic increase. I donât think a dramatic increase would be fair to the people who are leveraged, when they leveraged with the current facts. Also, maybe we wait to see how this will work on Arbitrum. With gas so much cheaper, we may be able to get the dynamic burn feature going?
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There will be plenty of space in vBNT when you yank your 244k out
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Absolutely not true. The closer the 1:1 peg is the more âsafelyâ I can take out a loan against my vBNT while continuing to stake my BNT for rewards. I can even sell my vBNT to buy more BNT and do leveraged staking. Saying âThere is no advantageâ makes me seriously question the other parts of your posts.
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Burn could be 50% but it wonât move peg. Unstake pressure doesnât exist while LM exists. All this will do is take APY from LPs and hyper-inflate the peg correction when pressure actually hits.
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Thereâs good reason to believe the LM is going to change soon and there may be significant unstake pressure from Bancor v3.
Again, a change to 20% is crazy just from a process standpoint, but a change to 10% is something that would happen soon anyway. I keep going back to the fact that the 18 month fee schedule was completely arbitrary. Vortex burn is a new feature. We donât know what the right % is and when to implement that %. What we do know is that the peg has been super low for awhile and that the original variable burn would have been at least 10% if not much higher for that whole time. We also know that the ability to leverage is greatly diminished with a low peg.
And, letâs actually put context to the swap APY loss that would happen. Right now 5% of swap revenue is diverted for the vortex. That means that swap APYs are 95% of the âtrueâ value of swap revenue. If we change that burn % to 10, swap APYs will be 90% of âtrueâ swap revenue.
That means, for example, a current 5% swap APY would change to 4.74% APY. A current 15% swap APY would change to 14.2% APY. A 50% swap APY would become 47.37%. IMO these arenât backbreaking numbers, while the 10% increase has the obvious advantage of locking twice as much BNT in the protocol.
Iâm not an idiot. I detect the hand of simp here too. That doesnât mean raising the vortex % is purely a bad idea.
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Also open to âsomethingâ besides 20% RIGHT NOW. This is a disingenuous proposal. And is not looking out for the health of the protocol (as usual)
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So this is the correct perspective in my view as well. Iâm a brand new account as you all will likely note and yes I bought vbnt because I liked samâs idea like many others. What I donât understand is why so many on this thread are acting like it would be a betrayal of leveragers to up the burn rateâŚwasnât it something of a betrayal of us speculators to handicap the burn rate at 5% instead of variable?? I get why it had to be done due to difficulty of implementation but the result was that our capital was frozen during an otherwise massive bull run so we definitely lost out. Based on how it played out, the burn rate should pretty obviously be raised immediately in my opinion. It would be much higher by the original proposal which is what I made my purchase based off of.
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I also think that overly focusing on the plight of leveragers is unfair to those of us with lesser financial means for whom such tactics simply would cost way too much gas to ever be profitable. For the humbler portfolios, speculation was the more practical exposure route and we got a bit screwed when the variable burn rate wasnât implemented. Totally fair and thatâs how it happens in crypto sometimes but itâs not ok to then complain that changing things again would hurt the poor whale leveragers.
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As a vbnt speculator I kinda felt the same way when the original variable burn rate wasnât implemented. Why is this situation different?
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