Well right now, and correct me if I’m wrong here, the BNT collected stays in circulation - it’s only the vBNT that is removed. So I wanted to know if removing BNT from the circulating supply would have a more substantial price impact than the current model.
I would like to propose an alternative solution given the current emergency situation at hand. I suggest the following:
If the average vBNT-BNT rate is above .5 for the past 7 days (the check will happen on Sunday at 3PM UTC) then we burn BNT for the next two weeks.
If the average vBNT-BNT rate is below .5 for the past 7 days (the check will happen on Sunday at 3PM UTC) then we burn vBNT for the next two weeks.
If we burn vBNT when the rate is low then we are getting a better bang for our buck. I think psychologically, burning BNT directly is what is needed at the moment. As part of this proposal, I would also like for us to tackle the BNT that has been collected in B3 which is sitting at the moment because there is no B3 vortex that exists yet. I propose that we burn any BNT that is being collected in B3 at the moment. This amounts to the following:
The problem with vBNT burning is that the BNT stuck in the protocol is still user owned.
The protocol minted BNTs in pools that earn fees are decreasing over time as the (protocol owned BNT)/(user owned BNT) ratio decreases, thus the fees earned by the protocol are decreasing and the buyback amount is decreasing. (depends on total liquidity of course → more liquidity = more protocol owned BNT in pools)
What needs to be considered is the future earnings of protocol owned BNTs in pools. vBNT doesn’t earn fees, more protocol owned BNT in pools does.
P.S.: With the implementation of a global fee structure the earnings from the protocol owned BNT are of little concern.
Yep, I’m all for the vBNT burn at the discount. After reading the current proposals more so. The protocol is transitioning to all out global fee structure and the fees earned by protocol owned BNTs are becoming irrelevant.
There should be a mechanism to quickly switch the burn to BNT if 1vBNT>1BNT without governance. As the shorting of vBNT is popular, the panic to the other side is also possible and is better to front run this situation.