EMERGENCY Plan of Action - Involving a Foundation Bailout

EDIT
With your comments below I would like to hear from the community on what terms should a bailout be provided by the foundation. After this notion has been discussed enough, a formal proposal should be written up and voted on by the dao requesting that the foundation provide aid to the bancor protocol and its LP’s. From there we will see whether or not the foundation is truly aliened with the the community and the protocol, or if the foundation is only aligned with its own survival. ( should the protocol fail & the foundation not give assistance to prevent such a failure, then the successful passing of this vote could help the LP’s// the DAO in the future )

Preface

First I would like to state that I want the team to be given sufficient time to work on various fixes that may resolve bancors issues and or help to close the deficit gap.

I am opening this discussion because Mark himself said in a previous community call to open the discussion. So here I am now, opening it, looking forward to hearing from the rest of the community and from Mark. My hope is to give Mark all the talking points that we decide on and agree to, so that he can bring those points to the foundation, then give us feedback afterwards.

I believe that we are in competent hands, but I also understand that we suffered these major losses at or near the possible lows of the market. If the market were to bottom in these ranges, and eventually push up from here, the deficit could balloon out of control, and what is a relatively small problem now, could become one that would be significantly more difficult to repair.

Therefor the team should be given time to fix the issues, however, if / when the bull market resumes, and if the fixes arent in yet, then this issue must be dealt with before the problem ( the deficit ) gets out of control.

The team was right to pull the plug and stop ILP, however they were too slow to act. I do not want to see the team once again being too slow to act, WHILE not having a plan set in place for such a scenario. The team does not need to have a course of action for every scenario, but this scenario that I am discussing is a VERY realistic and probably scenario, therefor we should be prepared and ready for it when it comes.

Course of action

Either after x_______ amount of months or after the deficit grows to $ _______________

The foundation should step in and make all LP’s whole

thats it? that’s the plan?

Yes, this isn’t a plan which requires all the details of the typical recovery and all the changes needed to better the system. This is simply a backstop being put in place to prevent a large problem from becoming an outrageously larger one.

I do not expect the general public to buy and prop up the price of bnt while bitcoin pumps back up to and above the previous highs. I also do not expect that the burning of VBNT will prop up the price either to keep pace with a raging bull market. I do think that we need to discuss and explore all other options to improve bancor so that we do not need to go down this path, however, it is irresponsible not to have a plan for a scenario which will inevitably occur.

the foundation

I understand they are a separate entity. I understand that they are probably not legally responsible to co-operate if the DAO were to successfully push through a vote related to the above. However, it would be assuring for every LP of bancor if we knew the foundation was aligned with the wellbeing of bancor users.

the bonus effect

If the foundation agreed to such a backstop, then this would help to propel bancor moving forward towards our goal of fixing this issue.

  • Should the foundation only provide this protection for LP’s of v3 ? this would help to close the deficit gap

  • When ILP is restored, in order to prevent users from withdrawing, this guaranteed backstop from the foundation may deter people from withdrawing their LP position

  • Having this backstop in place will calm the minds of the users during this phase, will allow the developers to focus on whats needed rather than wasting time on these types of discussions AND its simply the prudent thing to do. Bancor must have a plan of action for this scenario because the market rebounding is a highly likely scenario and its irresponsible not to have a course of action when this time occurs.

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I think this is a prudent plan of action. There is a lot of pressure on the devs to do something that’s unheard of. To generate 30M+ of value on a diminishing supply of liquidity and trade volume. That’s a very tall order rife with execution risk.

I also made this suggestion here: Feedback Request: Potential Direction for Recovery - #154 by cryptokitty

This forum is for the BancorDAO.

If you have suggestions for the Foundation, that’s great. But this is not the right place.

Mark said on the last community call that if anyone wants to discuss with him, then we can and hes open to the talk. We need to have the talk here, and have everyone get on the same page so that we can discuss this with mark in great detail. this is the place to have this conversation so that we the dao can come to an agreement on what we think is fair

Can you direct us to the right place to communicate with the foundation?

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no but Mark can. Mark said in the last community call for someone to come and discuss this topic with him. so lets gather our thoughts here, summarize them then give mark the summary so he can communicate with the foundation on the daos behalf

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Great. This is in response to my suggestion here.

Remove instant IL protection and revert to previous method but 0.25% per day. This will give Dao time to work out treasury and revenue generating strategy. Meanwhile ask for help from the foundation (which Mark can do) or any other interested parties for loan to meet the short term protection need.

This will enable us to open deposit for all pools to earn trading fee and gain back trust from community.

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id like to remove the instant IL also. I never liked that idea. the protocol should punish people moving in and out quick and reward long term users

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It has to be acknowledged that the deficit will not be resolved in the short term, that praying for external funding to come in is a waste of time, and that the agreement has been stalled for no value in recovery.

Combined with the experience of the previous bull market of uncapped tokens such as luna, unlimited additional issuance may be a wrong decision.

Setting a cap and setting an increasingly difficult release mechanism to maintain the long-term value of bnt can attract funds from many defi projects.

After all these are completed, you can consider converting the previous deficit pool into forward delivery tokens, and at the same time forking a new pool to reopen liquidity, forward delivery can exit at any time at a loss, or wait for the deficit to disappear and exit.

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why do you feel that external funding is a waste of time if this very notion has not even been explored? we have not heard from the foundation that they are not willing to help us. also mark said on the last community call for us to open this discussion with him. so by simply not trying does not seem logical

I do agree that we need to explore options and create solutions to fix this issue, but having a backstop is a prudent measurement. bancor does need to find ways to bring in new liquidity and this is part of the solution.

but if all else fails you think that the bancor team should not have a last resort solution like the one i suggested incase shit hits the fan ? this is something that I cannot agree with.

creating a solution before such a scenario occurs like I outlined is something that we need to plan for.

For capital, admitting mistakes is much simpler than losing funds. From an asset management perspective, I think they are right not to help. Unless there are enough interests, they will not give help

This post was flagged by the community and is temporarily hidden.

Please Rename this post.

This is a forum for the Bancor DAO

Discussion about the Foundation should be directed to the Foundation. Not here.

and how do we direct this discussion to the foundation ?

also

the concept behind a bailout is only possible with the aid of the foundation. therefor it does not make sense to remove the foundation from the name of the post because the idea revolves around their assistance

Then you should remove the post. It is in the wrong forum.

This is a forum for the Bancor DAO to discuss solutions.

These solutions include features, modifications, parameter changes, protocol design and more.

If you would like to lobby the Foundation, feel free. But not here.

THE DAO should DECIDE on terms that we all agree on first. VOTE on it then lobby to the foundation. What part of this do you not understand ??

what if we elect someone to do all the talking and lobbying for us, but the majority of us disagree with the request ?

it will be because of people like you why we cannot clearly communicate.

THIS IS THE AREA FOR US TO HAVE THESE DISCUSSIONS … NOT ON TELEGRTAM nor on any other messaging app. HERE is where the DAO congregates and discusses things that affects us all.

So enough with your requests to remove this topic.

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As I have mentioned many times, this is the wrong place for this discussion.

Please direct us to the correct place to engage with the foundation. Not sure why is it kept so secretive.

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Please direct us to the right place then.

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Completely agree. BancorDAO agrees a position, then the Bancor contractors can use that to go to the Foundation if the line of communication still remains closed to us.

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