Proposal: Remove 30m BNT Auto Compounding Rewards

DAO Archive (SUBMITTED)
1

This proposal is expected to appear on Snapshot on Sunday, July 3.

FOR: The 30m BNT allocated to auto compounding rewards will be canceled.
AGAINST: The 30m BNT auto compounding rewards program will be created.

I propose the removal of the planned 30m BNT auto compounding rewards.

I fully understand that many will not be a fan of this, but I ask you to hear me out. Giving ourselves these rewards will have bad consequences.

We just witnessed firsthand the result of excessive liquidity mining rewards. Bancor nearly crumbled under the pressure of mass BNT-rewards selling & subsequent withdrawals.

This is the absolute last moment we need the auto compounding program. The result of this program would be trading a high ā€˜APRā€™ in the UI for a reduced price of BNT. Understand that this APR is not real, it is simply diluting ourselves and the value of BNT. If we did this, we would be putting additional strain on the Bancor Protocol as the price of BNT goes down - increasing the impermanent loss in every pool.

Itā€™s time to completely remove unhealthy liquidity mining rewards. Itā€™s time for Bancor to heal.

6 Likes
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Agree - I think for now itā€™s off the table, but open to putting it back on when the situation improves.

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I want to get rid of any ā€˜unearnedā€™ rewards. If we are distributing fees earned by the protocol - Iā€™m all for that.

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I agree with this and will vote FOR.

I donā€™t think we need LMR rewards ever.
If there is gonna be one in the future it should only be for BNT holders.
We have seen the damage LMR can cause and being known as the ā€œLMR Protocolā€ basically did us more damage than good in the long run.

We can make a way more sustainable way of earning yield on our BNT.

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Auto-compounding bnBNT is distributing fees back to BNT stakers.
Iā€™m for Pausing the enabling of it until we get stable, but entirely removing BIP-18 has more effects than are being discussed in this prop.
We also have to cancel the 10M TKN side LMR, which are used to fund the Dual-Sided rewards that we also voted on to distribute to teams offering their own Ext rewards on their pools.

Also, we very well may need 30M BNT worth of TVL after this run is over

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You are required to stake BNT in order to realize the APR change over a long period of time. Iā€™d like to see some good data analysis on if the 30M is a good number at this point and if the halvening periods are too long.

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I understood that the 30m BNT was not giving fees back to stakers - that it was BNT we created for the V3 incentive program. Even if it wasnā€™t, at this point I think we need to stop anything that is increasing the LP-owned supply of BNT.

In the future, if it is exclusively fees earned by protocol-owned BNT - Iā€™m all for that.

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Given the current situation at hand, I donā€™t think having any BNT rewards ATM is the right choice to make. This can always be revisited in the future once the protocol has been stabilized and is in a healthy state.

I much rather have the protocol own as much BNT (the vast majority) as it can because ultimately it will never actively sell it. This is in comparison to a BNT LP that could potentially do so and much higher probability for a TKN side LP that isnā€™t a BNT holder.

1 Like