This proposal is expected to appear on Snapshot for voting on 2022-08-14T15:00:00Z. Make sure to stake your vBNT for voting before this date and time to participate in the DAO decision.
- External function that triggers vortex and awards rewards to caller will be restricted to the DAO as the recipient
- DAO will receive all vortex rewards
- vortex cannot be zero due to gas etc. so this keeps more funds in the system by moving them to the DAO
- In the future additional mechanisms may be needed if we observe front running etc.
In the spirit of mitigating the Bancor protocol leaking value.
The DAO currently has 0 BNT or any other assets in its treasury.
The vortex currently sets aside a reward to whoever initiates it.
The DAO can vote to restrict access to the vortex initiation function to itself.
This would assign all vortex rewards to the DAO treasury instead of anons.
This would increase funding for the DAO without decreasing protocol revenue.
Between each vortex initiation BNT is set aside off-curve, so it is effectively burned temporarily. There is no danger to the protocol functionality or tokenomics if the vortex is initiated more or less frequently due to the new access restrictions and active management.
In the future the DAO MAY choose NOT to initiate the vortex for some time if the vBNT price is unfavourable due to temporary market conditions. The lower the vBNT/BNT price when the vortex is initiated, the better the vortex is for long term protocol health.
Read more about the Bancor Vortex Burner:
The reason we “can’t” just ditch the vortex reward altogether and have 100% go towards the burn is that then someone has to call the function at a loss because of gas. If we remove the rewards altogether we have to find a reason someone would be willing to pay the gas cost to initiate the vortex, or an alternative source of funds to cover the gas.
We don’t have alternative funding sources to pay gas, and there doesn’t seem to be any reason for someone to altruistically call the vortex.
By definition nobody would normally initiate the vortex unless they made a profit, so in this case we may as well capture that profit for the DAO, as it was never going to go to the vortex anyway and is wasted on anons.
For a non-scientific-and-highly-variable-due-to-market-conditions-idea of the scale of this revenue:
- Currently we see the vortex run every few hours so maybe 3-4 times a day
- When anon calls the vortex they make about $20-30 after gas
- If the DAO only calls the vortex 1 time per week (they have no competition) they can ignore the gas cost of all but 1 invocation
- Gas costs about $100 so total reward of the vortex is about $100-150
So maybe we can expect somewhere around 25 invocations for $2-3k per week DAO revenue
NOTE that technically all we need to do is set the DAO as a recipient so we MAY leave the vortex world-callable if that results in a better implementation at the smart contract level.
FOR: Vortex will only be able to be receivable by the DAO
AGAINST: Nothing changes