@foxsteven let me clarify further
“But I don’t quite understand how this reduces the deficit. In fact, unless I am not understanding, which very well may be the case, this would seems likely to increase the deficit.” => when a LP decides to migrate from Bancor V2/V3 to Carbon he/she only migrates the withdrawable value at the date of migration, voiding any further claim. So if all LP decide to migrates, the deficit becomes zero. If half of the LP decide to migrate, we’ve reduced deficit by 50%.
“In what I understand from your proposal, the concept is to mint BNT and give it to users who migrate. This will of course increase the deficit.” There is indeed new BNT tokens minted, but the back of the envelope calculation on a 80% APR shows that for every new BNT minted, you take 5 BNT out of circulation (without taking into account incremental Carbon fees). So the trade off is VERY positive.
@Joop to clarify, it’s very different from having ILP activated, because when an LP migrates he/she renounces on any IL protection related to V2/V3