1 less proposal for the DAO
I am referring to an LST/LST strategy. The conversion to ETH appears to be progressing as yudi updated recently in the other proposal.
ETH can be converted to wsteth on lido using the stake site https://stake.lido.fi/ and on rocketpool using their stake site https://stake.rocketpool.net/. Where is the inefficiency? There are two options to use for easily converting ETH to either wsteth or reth.
Can we resume this discussion? Almost the entire surplus has been converted to ETH. We should take advantage of the current BNT climate and figure out what to do as soon as possible.
@mbr @foxsteven @yudi @Here2DeFi Jen recommended tagging you to resume this discussion. Can you please assist in helping figure this out? My personal recommendation is to compare a general swap of ETH for BNT and burn versus any advantage gained by targeting specific pools and closing them.
Can we please resume the discussion in order to take advantage of the relatively positive BNT climate at the moment? Thank you.
Hey @umstah
You may have seen what I shared in one of the public telegrams.
In principle, my preference would be to use the POL to reduce the deficits. This would mean using the POL to remove BNT from pools. There are a couple ways to do that.
In either case:
As for targeting specific pools - I think this is dangerous as it involved choosing favorites as opposed to treating al LPs equally.
Iām not sure what other think.
Are we generally in agreement as a DAO that we should use the POL to reduce the deficit?
Iām in complete agreement that we should use the POL to reduce the deficit. Iām fine with a global instead of targeted pool approach as well.
I agree with all above. Letās use the POL to reduce the deficit.
Using POL for immediate deficit reduction instead of bootstrapping Carbon is the most sensible solution; immediate deficit reduction has the added long-term benefit of BNT burns from withdrawals which amplify effects of future buy action. Relying on Carbon fees hugely delays those burn benefits.
Plus, the POL only exists in the first place because of liquidity provided by LPs which enabled trade volume on Bancor; theyāve already paid in the form of 16 months of deficit, opportunity cost, surrendering virutally all their fees to the protocolā¦ they shouldnāt have to pay to subsidise Carbon as well because the Foundation arenāt marketing it effectively.
I would like to propose a split approach:
We close LINK, WOO, and VBNT - these three are each large pools and are much closer to being out of deficit than other large pools and will allow for a large BNT Burn. Being able to market that burn, and also being able to market to the market and LINK community that the LINK pool is out of deficit, could create natural positive sentiment.
The remainder would be generally and equally dispersed among all the remaining pools.
I second umstahās idea. Any good news we can hang our hat on from a marketing perspective canāt be overlooked. Weāve made solid progress but this is something more solid to pitch with. A slow steady grind doesnāt really inspire the masses and this would go along way to shutting down some of the more vocal detractors.
I agree with umstah as well. Please bring this to a vote.
I have (big) positions in link, eth and Wbtc. Itās time for closing one of the big pools and burn a lot of bnt.
No Bancorian should ever vote for favoring any specific pools over others. The only method that is beneficial to every BNT LP and TKN LP is to continue buying and burning BNT as has been done in the past which has led to MANY pools being closed.
Bancorians should be very concerned about anyone looking out for their own selfish interest by advocating for closing the deficit in their own pool as opposed to that of the protocol and ALL LPs.
I will be bringing up a proposal that will bootstrap Carbon via an ETH LST strategy in the next few weeks as I discussed previously in this thread.
I think I would need to be convinced of the merits of the ETH LST strategy over the burn strategy. So please make it very clear what the advantages are when you make your proposal.
I have already proposed the merits of my idea in this thread. My proposal will be a copy and paste of what I already typed here.
Alphavalion is there anyway to game out what kind of returns your looking at with your ETH strategies besides the napkin math regarding uniswap further up thread? I donāt mean this to be taken in a negative light Iām just trying to get a grip on your thoughts. Obviously market conditions make any kind of predication hard, which I recognize but thatās also a problem. So far underperforming expectations should be the rule of thumb not ābest case scenarioāingā things if past performance is any indication. I understand you feel this will bootstrap Carbon to some of the bigger players but what is the exciting narrative that can drive uptake from this option with no marketing budget to help from up high.
And while Iām sympathetic to the argument that no pool should be prioritized over any other, building out these ETH strategies is placing all our eggs into ETH outperforming everything else. While the slow grind against the deficit has been admirable Iād like something to actually change the narrative like digging out several of the largest deficits to go along with the smaller pools weāve already closed. One of the strongest narratives that we have is this team doesnāt quit which is a rarity in this space. But we need more examples to make that pitch with and one of the largest sentiment holes we have to dig out of is with the link crowd.
I make no bones about being biased as a link LP and Iām not one for shouting from the rooftops like a crazy personā¦BUTā¦ 
I think itās far more likely link in particular and several other tokens as well are going to out perform ETH this cycle.
Just my two cents. Hope youāll expand on some of your thoughts further.
This idea of bailing out individuals pools has been ACTIVELY discussed multiple times since the death spiral that occurred last year. Bancorians have always voted to buy BNT and burn in order to equally reduced the deficit across all pools without any special treatment to any pool. You will NOT find any support from me and I hope NOT from other BNT voters that care about the health of the Bancor protocol and ALL LPs.
There is only two proposals that I will support and that is ETH-LST to boot strap Carbon or BNT buyback and burn via Carbon. The ETH LST idea should yield about 5% from ETH staking alone without counting any fees from the volume it generates and returns from buying low and selling high. BNT buyback and burn has many problems including front running so any proposal looking to do that should spread the buyback over the course of MANY months and NEVER buy at the spot price.
What slow grind? Since I started my proposal in May to sunset Bancor 3, the Bancor DAO has been able to close over 40 pools in this time frame and everyday we are burning more BNT than before.
Proposal to start sunsetting Bancor V3 - LEVEL 1 Under Review - Bancor Governance Forum
The sentiment of the link āmarinesā or any other groups is the least of my concern. Bancorians at this point should not be faced by any of these individuals and instead I trust will do whatās right for the Bancor protocol and ALL LPs as they have done before.
So 5% staking return on $2.8 million from POL plus some other % based on ROI from carbon strategy? Are there any strategies already running that you feel are comparable just to have some point of reference with the data we have? Again just trying to be able to put some thoughts together to give this a fair shake.
The āslow grindā has been the last year brother. Itās not a knock on the team, what theyāve done so far has been admirable from a development standpoint but letās not act like this hasnāt been mentally trying for everyone involved.
Iām glad āsentimentā is the least of your concerns but alienating swaths of your user base is hardly a winning strategy.
are there any potential risks to ETH-LST ? For example if the LST has some unforeseen bug ? Any other potential risks?
Iām guessing that its more than likely safe, but then again, crypto is crypto
I would personally rather POL simply be used to buy and burn BNT. My fear is that POL is used to buy and burn BNT, deficits across the board improve/reduce, but then afterwards, BNT underperforms the remaining TKN pairings then deficits once again increase.
@alphavalion I agree that we should not pick favourites of pools.
Can you provide more details of the strategy you are suggesting?
Which LST?
What ranges?
What is the expected outcome?
Is the goal to generate fees to reduce the deficit or to grow the value of the POL? - The reason Iām asking is I think the ranges may be different if the goal was fees vs growing the strategy - what is the strategy trying to optimize?
If the goal is to generate fees, how much do you expect it to generate?
Of course there are risks. If we create a strategy to buy TKN low, and it goes to zero for a bug, we will have tons of that TKN.
I have no doubt this DAO will continue to build, shut B3 pools, bring more eyes on Carbon - which is legit the best protocol onchain. #Fact
Since this will introduce risks outside of bancors control, then I do not think that we should use the POL funds for an ETH-LST strategy. Bancor cannot afford to have any additional mistakes.
What we should do is use the POL funds to buy back and burn BNT, but strategically.
What I would recommend, is for POL funds to be used, around the same time as a planned release of a major update, for example, putting Carbon on an L2 chain. That way BNT can gain momentum initially from the POL funds, and then the news release afterwards can maintain the upwards momentum.
Now I know that you nor anyone from the team canāt comment on things related to the price of the token, but using the POL funds with a strategy like this will be more effective than simply buying and burning BNT in batches at a random time and day.
If this had been enabled when I proposed this 4 days ago the LINK pool would not have suffered a HUGE increase in the deficit due to a thirty percent price increase of LINK. The idea that we should close pools neutrally now is a complete farce and cannot be taken seriously. We need to pray that the price retraces a bit and get this done before it gets even worse.