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

I agree. We should burn BNT, not vBNT. In fact, were this proposal to go through, the rational play is to go long vBNT and short BNT (to hedge out BNT price action). This would push the price of BNT down, not up!

Update: On second thought, buying vBNT with any token other than BNT drives up the price of BNT. So scratch what I said above. Increasing the vortex burn makes more sense to me now.

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I get it, but there’s currently no mechanism for what you’re suggesting.

I’m very supportive of increasing the Vortex Burner to 100% on v2.1.

Not so much about increasing the Vortex Burner on B3, as I believe the effects of burning vBNT won’t be felt right away, only on a very long term. Even just having more fees contributes more to reducing IL.

Would just make it harder for BNT stakers to exit and sell. Increasing the vortex burner rate alongside pool fees would be much more logical to me. On B3, of course.

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I agree with the sentiment of driving vBNT (and BNT) price up. Do we know approximately how much burn this will generate? Assuming current market conditions (and trading volumes) persist, how much of the BNT do we expect to buy back over, say, the first month after this is implemented?

(To be clear, I support the proposal, just trying to understand the magnitude of the expected effect )

Vortex 100% steals the rewards for v2l lp in the end.
I mean, the whole situation is resulting, because the “bancor Cowboy Team” Burns the Wall, stops all unique Features and told everyone, “Stopping everything now is the only right way.”
without the dao.
We all are the Stakeholder, or?
In the Moment, everyone can see that, humans behaviour and greet are the biggest problems.
Oh i forgot fear!
Code ist law is the only chance, i think.
The Run to Exit isn’t infinity, so everything told seems a lie to me.
Have fun with rug, shill and Handholding eachother.
Nothing in Future can repair this mess, #bancordreamteam

If that is the case then the 100% and the 30% vortex increase, would only decrease the BNT burn, as it would take all the fees generated in v2.1 that were supposed to burn BNT. It would massively disadvantage the BNT holders who sold their vBNT to stake more BNT. This is not a great solution IMO.

The logical thing to do when the change goes through is, withdrawing the BNT position (at a loss) sell it for vBNT or exit completely because I’m pissed. The burn would eventually cause the vBNT price go up, the BNT price down and the protocol burning even less BNT.

You could argue that if the user deposited BNT leaves the protocol minted BNT increases and thus protocol earns more fees, but the fees would only burn more vBNT and if there are no more user deposited BNT, there would be only the pumping of the remaining vBNT out of orbit.

Do we need to exclude the v2.1 vbnt pool from the 100% burn?

The pool needs vbnt liquidity for the vortex to burn right? If you increase the burn to 100% on that pool to get people to migrate to B3, there won’t be any vbnt to burn and the price impact will be huge on each burn, giving the value to arb bots that will arb between the B3 and v2.1 pool.

This proposal should have been better formulated before it went up to vote on snapshot. The “FOR” reads the following:

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

but this is only applicable to version 2.1 and not B3 which is being asked to be ramped up to 30% as well.

A few thoughts on my end:

  1. This proposal is seeking to raise the vortex to 100% on v2.1 and 30% on B3 temporarily while there is no IL insurance enable on the protocol.

  2. I support raising the vortex fee to 100% on v2.1 to encourage people to migrate to version 3 of the protocol indefinitely. I suggest a separate proposal is brought up to the DAO that ramps this up slowly overtime after this proposal expires (it will be reset to 15% at that point in time) since the caveat is that this proposal is only active while IL insurance is disabled.

  3. The v2.1 vortex pool is smaller now than the B3 vortex pool:

image

vs.

1,118,511 in $BNT trading liquidity on B3 for the $vBNT pool. All vortex burning should be targeting the B3 $vBNT pool instead going forward as that will give us the best bang for our buck. This will also encourage these $vBNT hold outs to migrate to B3 since there is no vortex targeted at this pool anymore.

  1. There is no vortex available for B3 yet and all the vortex fees that are being collected there in the form of $BNT are sitting idle for now. Just wanted to mention this since some $BNT holders might be unaware about it.

  2. We have to be careful with raising vortex fees in B3 since that has to be balanced with making it attractive for LPs to supply liquidity to Bancor.

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