This proposal is expected to appear on Snapshot for voting on 2/21/23 at 6:00 PM GMT. Make sure to stake your vBNT for voting before this date and time to participate in the DAO decision.
Proposal reviewed by @primalglenn.
TL;DR
Bancor to update the ICHI-BNT pool fee to 1.3% to increase protocol revenue
Bancor to revert back ICHI on-curve liquidity to what it was prior to the temporary reduction in July 2022 (scheduled increase included) which was 2m $BNT
Since the most recent Bancor vote, ICHI has launched 40+ new vaults with partners locking in over $13M in TVL and automated liquidity strategies on-chain using Chainlink Keepers.
ICHI plans to work with the Bancor DAO to increase Bancor protocol revenue through increasing the pool fee tier to 1.3% and increasing on-curve ICHI liquidity to enable higher volume of trades to be routed to and executed by the BNT-ICHI Bancor v3 pool.
Benefits to Bancor
Increased protocol revenue due to higher fee tier
Deeper liquidity leading to higher trading volume on v3 pool
Growth Schedule
Current trading liquidity is 45,385 $ICHI and 422,870 $BNT.
There is 694k ICHI in V3 that can be made available for trading and at current price of $4.22 per ICHI this means that this is about $2,928,680. At a price of $.474 per BNT, this means that ~6,178,649 BNT would be required to make all this ICHI available for trading.
Note that this proposal is seeking to only increase the trading liquidity to 2m BNT which is about 1/3rd of that. (screenshot for context)
This proposal is seeking to increase the trading liquidity to 2m $BNT for the ICHI pool (the previous amount prior to reduction). Per the screenshot, this is an increase of 1,769,000 BNT of the “BNT Funding Limit” and about ~1,585,431 increase in the "BNT Trading Liquidity. (attaching a screenshot for context)
Hi Daniel, thank you for posting the information. The largest increases in Trading Liquidity proposed so far on any pools have been of 1m BNT at a time. I’d personally prefer to see a proposal for a 1m BNT increase vs 1.769m, and then a future proposal to increase the trading liquidity.
FIY the whitelisting and quorum requirements for this proposal are >40% quorum and >66.70% supermajority.
Thanks for the comment. I will say - this is returning the pool back to the state it was in just a few months back and not looking to whitelist something new or grow the on-curve liquidity to something it hasn’t been before. With that in mind, I am not sure it is directly comparable to other proposals seeking to grow liquidity to new levels. To me this seems great for Bancor because it has multiple ways of growing protocol liquidity.
Could you please provide specific reasons you’d prefer the liquidity grow slower and over what timeline if that is the case? I’d want to understand the reasoning behind that strategy a bit more.
Thank you for your reply Daniel. I agree with the statement that it isn’t comparable. Furthermore, any associated risk with trading liquidity increases is reduced at the moment since the ILP is paused.
