If this proposal passes, the vortex will burn BNT instead of vBNT for a trial period of 14 - X _ ? # of days on both v2 & v3
FOR: The Vortex will burn BNT instead of vBNT for a trial period of 14 - X _ ? # of days on both v2 & v3
AGAINST: Keep the existing system in place
- Proposal to activate burning of BNT instead of vBNT for a trial period of 14 days.
- Burning BNT instead of vBNT may net more immediate positive effects, and it is in our best interest to implement this simple, easy and quick to code change, and track its results before the data gets skewed from the addition of other agreed upon proposals and changes to the protocol.
*As trades take place, as a part of the trade fee, the protocol buys bnt to help facilitate the TKN trade ( positive effect of buying BNT already takes place ) however afterwards when the protocol swaps the BNT into vBNT, this then contributes towards lowering the price of BNT and raising the price of vBNT. Locking away vBNT locks up an even greater amount of BNT while $vBNT is less than the price of BNT…
HERES THE POTENTIAL PROBLEM… I am claiming that the LPs of vBNT are long term users of the protocol and do not contribute to the same degree as the short term sellers of BNT. Therefor the vortex albeit is doing a greater good for the long term health of the project, its effects will not be seen until the LPs of vBNT withdraw and try to sell off their BNT position. I am making the claim that we should not target the long term users of Bancor but rather the short term users / those who are actually the ones selling BNT
The Bancor community as a whole have the general understanding that while the price of vBNT remains below the price of BNT that it becomes more cost effective for the vortex to buy and burn vBNT.
This notion however may have played out in theory, however the sole purpose and desired end result of this was for the price of BNT to rise, not for the supply of accessible BNT from LPs to decrease. Since the inception of v2.1, I cannot confirm a period of time where the price of BNT had a sustained market rally due to the effects burning of vBNT. All sustained market rallies were due to organic buying of BNT via new users to the platform and investors.
The burning of vBNT has already had sufficient time since ILP & BNT minting was turned off to showcase its positive effects, yet the price of BNT has remained stable at or near 0.50.
As Albert Einstein once said, the definition of insanity is doing the same thing over and over again and expecting a different result .
I do not doubt the long term positive effects of burning vBNT, however I am suggesting that in this specific period of time, we should seek another alternative to see if it may or may not result in the positive effects of increasing the price of BNT & reducing the deficit.
I have written a lengthy post in the following thread that explains the reasons why targeting BNT may be more beneficial in the immediate short term than targeting vBNT, so rather than crowding this post, I respectfully request that you visit for more details Discussion: Stop Burning vBNT - burn BNT - #26 by Jindo
If you have comments, please leave them below here on this thread. After sufficient discussion, I will create the proposal and we can vote on it this weekend.