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First and foremost I understand this has been a widely discussed topic.
I understand the reasons for burning VBNT as the price of VBNT < BNT therefor you get more bang for your buck by burning VBNT
However, this very idea is assuming that all BNT are equal and the only thing that matters is reducing the total supply will prop up the price and reduce the deficit. This is not the case.
My assumptions
- Those who stake their BNT & their VBNT are more than likely more committed to the Bancor protocol and are more than likely longer term users.
If this idea is true, then the likelihood of these BNT being sold on the open market are less likely than those who simply have their BNT sitting in their wallets, ready to be sold.
By burning VBNT the vortex is targeting the wrong type of user
- Long term users
- Short term users
The long term Bancor users, like myself, have simply accrued BNT over the years and re-staked. I have personally never sold any of my BNT holdings. Therefor, by burning my VBNT, it literally had no effect on the protocol whatsoever
However, if the protocol has burned BNT from the open market, then perhaps this could have had an effect on the price itself. And when the price of a coin pumps, it helps to gather attention from others and it puts Bancor back into the spotlight.
If you still disagree with what I said above, then take this extreme example
Say the bnt total supply is 100,000, and I, the whale on bancor owns 90,000 bnt. I also have agreed that I will NEVER sell any of my bnt. I will simply become the LP for bnt and vbnt. I will also be the ONLY LP for bnt and vbnt ( once again this is an extreme example being used to help you understand my point )
With the above scenario, if the vortex burns my vbnt and removes some bnt from circulation, will this lead to positive effects on the price ( once again im the only LP for bnt and I will NEVER sell any of my holdings ). The answer is no. I wont be able to withdraw all my bnt because some of my vbnt was burnt… but I wasnt going to sell anyways
The vortex right now is currently targeting the group of users who are less likely to add sell pressure to the bnt token. Why not flip this around?
At minimum, is this not worth a 7-14 day trail period?