Proposal: Reduce Vortex payment to initiator to 2%

DAO Archive (SUBMITTED)
1

This proposal is expected to appear on Snapshot for voting on 2022-07-02T23:00:00Z. Make sure to stake your vBNT for voting before this date and time to participate in the DAO decision.

To pass, this proposal needs a quorum of 35% and 66.7% FOR votes.

We should reduce the payments made to the vortex initiator to 2%, it’s currently sitting at 10%. See the screenshot below from the official docs:

vortex

Reasoning :

  • As of the following proposal the vortex is increasing to 100% on V2.1 and to 30% on V3
  • Due to the current TKN IL deficit, the vortex fees should focus on burning vBNT and locking BNT to enhance the deflationary tokenomics of Bancor
  • The increase in burning rate should also increase the absolute amount of fees made, thus having a decrease in the percentage paid to the initiator will still result in a more than reasonable payment
  • Gas also being cheaper now, will lower the overhead for the initiator

My above reasoning makes it that a decrease in percentage paid won’t be a risk of the initiators not starting a burn and thus decreasing our costs by a whopping 80%

TL;DR;

Vote FOR to have the vortex fee reduced to 2% for the initiator
Vote AGAINST to have the vortex fee be as it is.

6 Likes
2

Agreed - thank you for the proposal @AnimaDunk !

1 Like
3

Agreed - approx 5x in Vortex fees should include a drop in initiator payment. Should we cap the 100 BNT as well @tfns ? 20 or 50 BNT?

1 Like
4

Huge fan of this proposal! Thanks @AnimaDunk!

@sylentz, I don’t think we should lower the cap. If we bring it down too much, it may never be worth running the Vortex due to high gas rates.

1 Like
5

Yeah it’s tricky, I guess since it’s “lower of the two” the 2% should ideally take care of that.

1 Like
6

@AnimaDunk can you also add to this proposal that all vBNT burning should occur via the B3 pool instead?

  1. 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 Like
7

I agree with this proposal too

8

Hey Glen,

I agree with this. Of course, the buys are always small, so slippage is mostly not an issue, we should always get the best bang for our buck with the vortex burns.

I’ll look into it today and decide if it’s best to make another proposal for this or add it to the current vortex reduction one

1 Like
9

I think this should be done more dynamically in the future.
Maybe with our upcoming analytics tool, we can make a detailed report on how the vortex and the initiators are performing.

We should be able to quickly adjust the fee to the current market conditions.

CC: @sylentz

10

One thing to add here, the vortex in Bancor 3 can also be triggered automatically via a set scheduled using chainlink keepers. This is a backup mechanism in case no one triggers it from the outside. I think for a keeper job, we just need to have some $LINK deposited to have that happen automatically (it comes out of that allowance).

For v2.1 though, the initiator might just wait longer before triggering it (once it becomes profitable to do so).

1 Like