Proposal: Increase Vortex Burn to 100% for V2.1 & 30% for V3

DAO Archive (SUBMITTED)
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This proposal is expected to appear on Snapshot for voting on June 26, 2022 (Lisbon). This proposal is to increase the vortex burn to 100% on version 2.1  This should be ramped up from the current 15% to 100% over 2 weeks. The schedule will be 40% burn rate immediately, 70% after 1 week, and move to 100% after 2 weeks.

Next, increase the vortex burn to 30% on version 3. This should be done immediately. 

Reasoning:

  1. LPs earning fees is of lower importance right now, but volatility is high and this represents a shared opportunity for the protocol and users.
  2. There are no fees if Bancor doesn't survive.
  3. Burning more vBNT counters inflationary risk. We need this now.
  4. Using the vortex to market buy BNT is good for ALL Bancor users.
  5. This action may help to restore user confidence. 
  6. This may help counter the coordinated shorts against BNT.

We can collect and analyze data from the vortex increases and adjust if needed. Voting in favor of this proposal means the vortex fee will return to 15% upon ILP reactivation.  

 

Vote FOR to increase the vortex to 100% while ILP is not active

Vote AGAINST to do nothing

9 Likes
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common uninformed user here saying this sounds great, set limits or bounds though

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I’m only suggesting this increase while IL is paused.

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I struggle with the vortex burn.

I can see how it works to buy BNT price over the long term. However, I’m not sure it works over short periods.

Also, how effective it is at the current time?

Will higher vBNT price help BNT price or just make it harder for (some) BNT stakers to exit and sell.

I wonder if doubling all LP fees and increasing vortex to 50% would help LP income and vortex burn?

2 Likes
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There will be no LP income if Bancor doesn’t recover. The vortex buys BNT at market price and swaps for vBNT, then burns it.

If you’ve sold your vBNT this could have an impact, IF vBNT increases in price and you need it back.

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Yeah, vortex accumulates the fees in token before it buys BNT

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Send it. When Snapshot vote?

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I agree that a lot of LPs are going to leave Bancor, regardless of the vortex being set to 100% or not.

BUT there are also LPs that aren’t looking for the exit anytime soon. Let’s not alienate more LPs by also taking the fees away from the ones looking to stay.

The Bancor protocol is already taking a lot of fees. Everybody waiting in the withdrawal contract is forfeiting the fees that they would be earning if they weren’t waiting to exit.

If they cancel, they’ll get their fees back.

So this can go two ways - 1) they withdraw, voluntarily forfeiting all fees they would’ve earned anyways.

Or 2) they cancel, start the process all over again, giving Bancor an extra week to increase confidence for that user.

So don’t rug fees. They’re voluntarily giving them up anyways. And if they decide to cancel their withdrawal, take that extra week as a way to prove that the protocol is here to stay.

8 Likes
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Interesting - I suggest you add a little bit more so this cn be voted on.

At they very lease:

Vote for to increase the vortex to 100% while ILP is not active
Vote against to do nothing

3 Likes
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I’ve updated my original proposal to be more inline with how many may feel about keeping fee earnings ongoing.

3 Likes
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For 2.1 - maybe once this proposal passes

vortex to 40
1 week later - 70
after 2 weeks - 100%

2 Likes
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I support the updated proposal.

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When would you like this to be on Snapshot?

If Sunday (the usual day) please make a note at the top.

Also, please outline a more specific schedule to get to 100% vortex on V2.1 - otherwise its not clear how to do this.

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Should the proposal explicitly state it will return to 15% after ILP has been reactivated, or suggesting the final result may be a number different than 15% based on ongoing analysis?

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I’m extremely supportive of this proposal.

I would personally like to see a larger rate on the V3 burner - 50% - but I would still support the proposal as is.

3 Likes
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I agree with you. I’ll add

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I agree, but let’s get some Data.

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Great proposal. This needs to be paired with a slow introduction with ILP. 100% vortex means there will be no trading fees saved into the protocol to build up for ILP. Moving forward i think ILP should only be covered from trading fees and not this minting mechanism (as far as I understand it).

4 Likes
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This is for only 30% on V3.

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I propose that the new 100% and 30% fee (for the time of the ILP pause) is used to fully burn BNT, not vBNT. The burning of vBNT doesn’t decrease the BNT supply!

  1. It locks it and takes value from LPs that leveraged their BNT by selling vBNT.
  2. With this proposal you would effectively take ~5% of fees from the protocol that it uses to burn BNT (fees on protocol owned BNT)
2 Likes