Srsly it’s a lot like the gme situation. A bunch of the bigger players levered up (shorted vbnt) and then a whole bunch of us smaller ppl (maybe lead by simp) tried to call them out and got a bit hosed on the failure to implement variable burn. Some big fish are buying it back now out of fear this will happen but if it becomes clear that it won’t, back to the dungeon with us.
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Good, Bancor will go back to burning a large number of vBNT tokens and locking more BNT forever.
Only BNT LPs benefit from a higher vBNT rate. But that doesn’t necessarily mean that we will see growth in overall TVL.
We need TKN LPs to increase TVL.
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We got screwed. I agree. But we need to think about the bigger picture.
Even vBNT holders at a .3 rate will greatly benefit from BNT going to $25-$100.
I bet a pump will also bring a vBNT short squeeze leveraging your gains.
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Following up on this theory, I would love if the @BurnVictim can provide more information about the pools that are full and why jumping to a 20% charge is necessary.
After a quick count, 6 of the top 20 pools (excluding stablecoins because those pools are closed not full) seem to be full at this moment.
If the main motivation of this proposal is to increase liquidity by having more BNT LPs leveraging to provide more liquidity, then a hike to 10% certainly seems to be more reasonable to open space in the pools that are full, since they only make up 30% of the top 20.
A hike to 20% certainly seems like it’s overkill for the other 70% of pools which require more TKN LPs, not BNT LPs. And lowering APRs for those pools will certainly not help grow LTV → Volume → fees.
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Torn on this proposal, but I appreciate all the debate here which should help community members decide for themselves. Hopefully future debates can be a little more civil.
Thinking out loud here:
In the short term, it may be a wash in terms of counteracting LM inflation. At a rate of around .5 vBNT / BNT, we are locking 2 BNT in the protocol for each vBNT burnt and previously were locking up to 4 vBNT, so that actually was fairly good for opening up SS liquidity space. As vBNT closes the gap to BNT, we should see more people entering the vortex as risk decreases the closer we get to the peg, so while fewer BNT will be locked per burn, more transaction volume will occur and cancel out. In addition, the higher burn seems like it will temporarily reduce APRs, but again that could be counteracted by more people entering the vortex. I’m inclined to think that the incremental jump is more sustainable and will give us more data on the willingness to pay / sensitivity of TKN side stakers which will be hard to measure if we jump right to 20%, but at the same time they clearly are getting way too good of a deal. I’m inclined to think the higher leverage action to deal with inflation is to get rid of LM programs that aren’t in the long term strategic interests of the DAO or are paying way above market rate than to attack it from this angle.
As it stands, I would like to see the burn increased to 10% immediately with the understanding that we will quickly measure the effects and ratchet up if necessary.
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Let the record show that @BurnVictim is NOT making an effort to respond to my latest questions and comments.
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