Increasing demand for BNT to aid deficit and recovery efforts

Community Chatroom (DISCUSSION)
1

The objective of this proposal is simple: to drive purchasing demand for the BNT token in an effort to address TKN deficits and aid protocol recovery.

In order to increase demand for the BNT token, this proposals requests the reactivation of liquidity mining rewards in a responsible manner.

This proposal requests that a special BNT rewards program be established where rewards are earned in BNT. Participants in this pool agree to lock their BNT in the pool until the date of the next Bitcoin halving event (May 2024)–so, no withdrawals following initial deposit until BTC halving of 2024. Participants in this pool will receive their pro-rata share of 10m BNT (quantities can be adjusted), which is 1/3rd of the amount originally intended for auto-compounding rewards. The rewards are earned from the date of entry through the BTC halving of May 2024 and are issued bi-weekly, every Sunday at 3pm UTC coinciding with the community calls, but stay locked in the protocol following the redemption logic. Following the BTC halving, initial staked BNT becomes unlocked and 1% of earned BNT rewards become redeemable every ten days, meaning rewards are 100% redeemable 1,000 days after the May 2024 BTC halving.

This proposal aims to create immediate demand for BNT. It aims to keep that BNT locked into a pool until May of 2024. The rewards earned become redeemable at a rate of 1% every ten days, which prevents large sums of BNT being dumped on the market.

With responsible incentives the BNT token can recover, which aids recovery efforts significantly and gives community contributors more runway to successfully introduce innovative revenue streams.

The protocol can again advertise a high APY for staked BNT, which will attract new buyers and re-introduce a responsible form of liquidity mining rewards, which will not touch the market for almost 22 months and will slowly leak out over a span of 32+ months.

2

I think this is at least an interesting pathway to explore. I’d like to see some of the game theory played out on the idea to prove its probability of success.

3

The goal would be to create new purchasing demand for BNT. If a new wave of purchasing demand can be created and sustained for a special rewards program that keeps BNT locked, BNT can experience a spike in demand at a time when ETH and LINK are expected to also see spikes in demand with the ETH merge and LINK staking looming. Instead of facing a situation where the deficit in these two pools grows, BNT has a chance of maintaining parity or even generating a surplus, given other parallel efforts (fee burning, yield throttling, etc.). With the increase in community participation in governance forums, telegram, and discord, a special rewards program that directly impacts BNT demand would see wide participation as the community has demonstrated an increased willingness and interest in the protocol’s recovery to full health, and a responsible LMR program can serve as a recovery accelerator, while other sustainable initiatives are implemented. The long redemption period mitigates effects that could potentially be harmful to the protocol on the backend–and given that rewards would be redeemed from 2024 to 2027 new use cases/applications for BNT could see these rewards repurposed or re-staked as opposed to swapping for TKN.

The BNT that is initially staked and unlocks at the BTC halving event, based on history, should coincide with favorable market conditions.

Plain and simple, lots of community members, LPs, and Bancor believers want to directly participate in the recovery efforts, and all they need is a little incentive. Setting aside 10m BNT for this purpose provides the proper incentive for these supporters and provides immediate relief to BNT, which immediately and positively impacts the health of the protocol.