Proposal to start sunsetting Bancor V3

By now, it should be clear to the entire community that ILP is never coming back and no BNT holder will ever vote for reenabling such a feature ever again. Since the release of Carbon, it is quite clear that this is the future of Bancor for now until more products are released (yes, I think this is just the beginning). To that extent, this proposal is seeking to start sunsetting V3.

Via I was able to pull a CSV file of all the current V3 data. From that CSV I filtered out anything that had a master vault balance of 0 as it was just adding noise. The left over tokens where then sorted by the “Surplus/Deficit” percent to produce the following top 10 tokens with the highest surplus:

Symbol Master Vault Balance (TKN) Staked Balance (TKN) Surplus/Deficit (TKN) Surplus/Deficit BNT Trading Liquidity TKN Trading Liquidity
DRC 16,348,845 1 16,348,844 1634884400.00% 0 0
FODL 10,174,584 37 10,174,547 27498777.03% 0 0
DAO 3,375 0 3,375 5532887.17% 0 0
AUC 6,338,967 274 6,338,693 2314129.96% 16,205 4,162,871
DDX 6,116 0 6,116 1568203.17% 0 0
KTN 37,335 3 37,332 1146435.51% 14,213 23,336
SHEESHA 789 0 789 961819.66% 11,548 789
APW 73,710 9 73,701 825906.01% 20,370 25,936
IDLE 32,074 5 32,069 642844.61% 16,327 27,518
HEGIC 1,641,375 458 1,640,917 358118.13% 13,247 468,402

This proposal is asking for the following to happen:

  1. Disable trading on all these pools by setting the funding limit to 0 (some of them already have this value). This will burn around 92,000 BNT from circulation and reduce the supply by this quantity.
  2. Any surplus token quantities for every token in this list to be removed from the V3 master vault and moved over to Carbon. These tokens to have a strategy created TKN-ETH in Carbon that will sell them via a limit order at a 5% premium based on the last 30 day time weighted average price or current price if 30 day TWAP is not available. I don’t think there is a rush from the DAO so we can wait for markets to get there (if they ever do). Using Carbon is useful as it helps us build up TVL and also lets more people take notice as strategies are created. I ran some numbers on these tokens and came up with the following figures if we were to swap them via 1inch at current prices today. Where possible, I tried to list the most liquid pools so that we can figure out current token prices when creating carbon limit orders:

a. 16,348,844 DRC is roughly 2.85 ETH via 1inch and Uni V2 has the most liquidity (Uniswap Info)
b. 10,174,547 FODL is roughly 12.95 ETH via 1inch and SUSHI has the most liquidity
( , Pools | Sushi )
c. 3,375 DAO is roughly 2.71 ETH via 1inch and Uni V3 has the most liquidity (Uniswap Info)
d. 6,338,693 AUC has little to no liquidity anywhere and when swapping this amount via 1inch 90% gets routed to Bancor (split evenly between v2.1/v3). No ETH estimate for this one and the following Uni V2 pool can be used to get pricing Uniswap Info
e. 6,116 DDX is roughly 1.08 ETH via 1inch and Sushi/Uni v2 have the most liquidity
( , Uniswap Info)
f. 37,332 KTN is roughly 4.87 ETH via 1inch and Uni v2 has the most liquidity (Uniswap Info)
g. 789 SHEESHA is roughly 2.77 ETH via 1inch and Uni v2 has the most liquidity
Uniswap Info
h. 73,701 APW is roughly 12.048164 ETH via 1inch and Sushi has the most liquidity
Pools | Sushi
i. 32,069 IDLE is roughly 4.05 ETH via 1inch and Sushi/Uni have the most liquidity
Pools | Sushi
Uniswap Info
Uniswap Info
j. 1,640,917 HEGIC is roughly 7.68 ETH via 1inch and Sushi/1inch have the most liquidity
Pools | Sushi

Some of these have high slippage but I estimate roughly 45-55 ETH or so can be recovered here if all orders are filled in the future.

  1. Whatever ETH is recovered from these sells to in the future create a carbon BNT-ETH strategy that creates a buy wall at a 5% discount based on current BNT price. The buy wall to be revised every 7-30 days and when the current price of the buy wall is off by 10% or more from the current BNT price. The goal being that the buy wall should move up as the BNT price goes up.
  2. Whatever BNT is recovered from takers eating into the buy wall to later be burned after a sufficient amount of BNT is acquired. This can be voted via a separate proposal similarly to recent proposal that burned BNT which had accumulated in V3.

Assuming this proposal passes, the DAO can considered repeating this process for the next 10 tokens until all pools in V3 that have a surplus are disabled.

For: Approve the plan outlined in steps 1-4
Against: Do nothing


Thank you for taking the time to post this and I appreciate the time and effort here.

A few things I would like to point out:

This is WAY WAY too fast for such an important proposal. We as a DAO should take our time to think through, simulate and prepare for this.

While this is one approach, I have personally been thinking of another use case for all tokens in surplus on V3 that can be used in a way to make the fast lane more efficient while at the same time reducing the deficit on some of the pools that need it the most.

I am planning to write a detailed post about this once Carbon is fully up and running (protocols, much like babies, are not born fully formed).

Generally speaking, the future of V3 is likely to be one of the most important decision this DAO ever makes.

Accordingly, I would not want to rush anything.

I would like to have a long period of discussion in the form of calls and posts in this forum as well.

Something that @mbr wrote recently I think is super important and I would like to quote him.


It would be wise in my opinion to take our time here understanding that right now Carbon in my opinion should be the main focus.

Deploying is only the start. Previous versions of Bancor were widely integrated all over Ethereum as a result of years being live on mainnet.

In summary - this is important, but I strongly suggest we move forward in a slow and measured way and ideally we give Carbon some time to gets its legs under it.

This will only make whatever decision we make as a DAO more informed and less rushed.


I don’t support this proposal.In my opinion the protocol will do great in the soon to come bullrun and after that It will keep earning fees with the surplus tokens and put pressure on BNT price.We did not wait so long for nothing,we just need a little patience.


If any ETH is recovered, especially on the understanding that v2/v3 are being sunsetted, I would far rather see that ETH put into a bucket to help compensate LPs (who’ve remained in deficit for a year whilst giving the vast majority of earned fees to the protocol) as they withdraw. If people actually care about BNT and actually want to trade BNT on Carbon, there should be enough of them making such strategies on their own, without Bancor trading project funds (and creating possible legal implications by building a buy wall for the protocol token) on Carbon.


Agree with @foxsteven here, and would add/reiterate its very premature and rushed to do this now.


I will update the proposal to go up to snapshot in two weeks and this would be 5/21 instead of 5/14. I think that if you have a competing proposal or idea that this should be more than enough time to have something in governance for the community to review.

It shouldn’t matter whether carbon is ready or not since your proposal can be voted in by the DAO but be implemented at a future date or when some criteria is met. As the author you should be able to specify that.

The future should be quite clear by now to everyone in this community. The V3 model is broken and not attractive for any LP to deposit funds into. Furthermore, we all know that we can never overcome IL with fees and this was proven by the experiment that was ran for 2+ years. It makes zero sense for any focus to be put into a protocol that is no longer working as intended. The goal as stated by other main members is to recover the deficit there and that should be the top priority for everyone in this community.

I agree and I think this proposal is a step in the right direction as it puts the focus on Carbon and building up its strategies, TVL, trades, and everything else. There is nothing in Carbon at the moment that prevents this proposal from being implemented.


The soon to come bullrun is speculation and for all we know there could be a bear in the future. We should not stop DAO operations due to speculative narratives.

This proposal achieves a reduction in BNT supply which attracts the normal investor that sees deflating supply tokenomics. It also means that the price of BNT can more easily move as there is less liquidity onchain. Lastly, it also let’s the DAO acquire ETH that will be used to create a backing for BNT via Carbon.


We all know that we can recover the deficit equally across all tokens by buying and burning BNT as we need the price to rise relative to everything else it is paired with since every token in v2.1 an v3 is paired with BNT. This has been the DAO strategy since the events of last year and I am not looking to change that. If you think that distributing ETH is better then I suggest that you start by creating a separate proposal that modifies the current buying and burning of BNT that occurs in v2.1, v3, and carbon and perhaps converts everything to ETH to distribute to LPs.

Agree with the other points, anyone can create a strategy for BNT on Carbon just like bancor DAO can create a backing of ETH for BNT on carbon to let us buy it at a discount. I am not sure what legal implications you are alluding to and whether there is any basis for that. We buy regularly from the markets BNT already without any “legal implications” and this is no different besides creating an order that buys BNT at a discount.


I disagree with foxsteven but would like to hear why it is premature now and when you think this should happen? I am more interested in knowing whether the proposal as it stands has anything wrong with it or can be improved upon.


This is an interesting take / approach at reducing the deficit … or making it slightly simpler to repair the damage done. Whether or not this will in reality work is beyond me, but I applaud the idea and I am also in favor of giving this a shot.

As much as I would like to simply wait for Carbon to repair the deficit, I do not wish to place all my eggs in one basket. While we wait for carbon to push forward, we should still explore other means and assist in repairing the deficit in any way we possibly can.

As much as Mark tells us that time is on our side, time is also working against us, and when the eventual bull run occurs, you had better hope that the deficit is already repaired and BNT a desirable crypto asset, because if not, then I nor any of you ( unless you’re on a paid salary from the bancor foundation ) will be able to stomach the devastating loss that will await you in this circumstance. To be transparant, I am a part of the wbtc pool, and if BTC goes parabolic, my life savings will vanish.

If what being suggested may reduce the deficit, then I am 100% in favor. Once the deficit has been repaired, then we can reverse the current actions. But until then, we should do everything we can to reduce the BNT supply, make it easier to increase the price of BNT, and all efforts should be completely geared towards repairing the deficit.

I also look forward to hearing other creative methods at repairing the deficit, and once again, I’d like to give thanks to and applaud @alphavalion at thinking outside the box.

I’d also like to add that the most straight forward method at making the BNT price go up is via organic growth. If investors see a reason to buy the BNT token, then the price may possibly rapidly rise, and the deficit rapidly shink. The only times in BNT’s entire history of BNT outpacing wBTC came from investor demand due to speculation ( never from buying and burning BNT ). If we can find a way to make BNT more attractive, then this may also be the solution that we need. In my opinion, if we enhance the BNT token with additional attributes, such as protocol fee sharing ( or whatever else you can think of )… then this could also be the solution that we’re looking for to repair the deficit.


Thank you for the support. This proposal seeks to slowly start this process and overtime I think we should start to see good results as the

  1. BNT supply decreases due to retiring surplus pools
  2. Less BNT liquidity in these exotic pairs means that we can move with the market easier on the upside
  3. Create a support for BNT via Carbon that let’s us buy it a discount on the downside

I am all for moving Carbon forward and I think this proposals serves that across multiple areas as it lets us utilize Carbon for its intended purpose by creating strategies, orders, building TVL, getting fees, and other functions. This should bring more attention to Carbon the protocol and slowly start building a user base which is good for the community as more adoption means more usage and more fee generation.

We are slowly starting to get traction and there is a good narrative for BNT going forward which consist of

  1. No more BNT printer for IL protection or providing liquidity to token projects
  2. No more BNT rewards or inflation
  3. Constant BNT burning from multiple sources including v2.1/v3/carbon
  4. A team that has delivered and deployed a good financial instrument in the span of 9 months after many took the project for dead. I am certain that this is not the end and just the beginning of what is to come.


Why is it so hard for everyone to get this. The Snapshot date is date of vote, not implementation.

This would be great as well. So much is being done non-transparently and the DAO has no way of knowing this. The DAO being given info through Cunningham’s Law is very inefficient.


Is the only data point you need to see. These are dead/abandoned pools and should be shut down while in surplus. Let’s start the precedent to close down v3 until CP-AMM can be fixed or declared fully deprecated. Moving the Liquidity to Carbon orders is a much better idea to remove exposure to IL.
The delay of a week should be fine for @foxsteven to open a Discussion on what to do with the surplus. It’s going to take some work to proceed with any option for PoL so can be adjusted with future votes


Thanks for the comments and the feedback. It is my opinion that the wider Bancor community has already come to terms with V3 and its eventual sunset and we should not beat around the bush as the Americans put it. Our focus as a community should then be to make Carbon a successful product and bootstrapping it as much as we can which this proposal achieves.

I would also like to see the proposal from foxsteven around the POL and from anyone else in this community that has similar ideas. I have given more than ample time for other ideas to surface and for the DAO to be able to vote on what they think is best.


Hey bud, sorry for the delayed response.

The crux of my disagreement is more in timing than approach. What I do like about your proposal (which by the way greatly appreciate all of the time, effort and attention put into it) is that it begins to solve the issues with v2/v3 with the most approachable pools. Your proposal title says it best, “start sunsetting” is a good approach that I agree with, but to clarify my issue is that I disagree that this needs to be done now.

To explain, I sense that Bancor and Carbon is in a very crucial period that requires as much focus and attention that we can muster, especially with the deveopers. As such, although from the outside it appears that most things are in place and we’re just in the waiting stage, I get the sense that many things require constant attention, with the potentiality that issues and/or demands to get Carbon in an optimized state will continue to demand crucial time and attention. It’s an issue of priorities, and I place Carbon at the top.

I understand the contention that we could just vote on this, and it can sit idle until the right time. Yet I put myself in that place of having that additional work hanging over me, and how it comes at a cost of mental space. Look, I may be underestimating the capacity of our core dev team, but I would like to give them all the possible support and headroom to focus all efforts on getting Carbon running at its best.

So ultimately my issue is one of giving respect to a finitude of attention and focus, and the human element to our super technical world. My view is that although there’s no way of knowing the difference of capacities on outcomes, I would like to set the stage for the best possible outcome for Carbon, even at the sacrifice of expediency. Personally, I would like to give all focus to Carbon until it becomes clear that we have excess capacity to begin to tackle v2/v3, which again I like your approach. So to answer your question of when, I would say it will be an easy call when the time is right, i.e. Carbon is humming and its clear we have excess capacity to wisely tackle the past issues.

So to quickly sum, I agree with your approach, believe its directionally correct on beginning to address the past issues, just disagree with the timing. Again, maybe I’m being too subjective in my hesitation as we’ll never truly know what distractions can do on an A/B test, but I do think that relatively increased focus on Carbon as a priority increases the probability of better outcomes vs. adding additional (albeit immeasurable) distractions to finite time/attention resources.


Thanks for the reply. I concluded that you don’t disagree with the approach but rather this is an issue with the timing. This is good because it means we don’t disagree on the method that I proposed :muscle:

I think that right now carbon is in its early stages and that we as bancorians should start looking at ways to bootstrap the protocol. I am sure that the team is working on this internally as well but as the saying goes

“Ask not what your country can do for you – ask what you can do for your country"

I do not know how long something like what I am proposing will take to implement and I think @foxsteven @yudi or a developer can tell us. I do have a reference of a similar proposal in the past that did something similar Proposal: Rescue any available value from protocol owned renBTC in V3 and this was something that was completed in a few days from the passing of the vote. This proposal is very similar to renBTC except that we are not market selling the tokens but creating carbon strategies instead. I don’t see any new development needed here besides using Carbon and I think this is minimal effort for this reason.


Hey @alphavalion,

What about using the other surplus pools like a COMP and ARCONA.
There is quite a lot of POL we can still use from B3.
Did you want to use these pools you mentioned as a sort of Trial Run before implementing the other bigger pools?

Fully Agree that Carbon would make it of course far more efficient as you said and we would be taking off the IL risk we’re facing on them.


See my post above highlighting the lack of Staked Token entirely. These first 10 are a perfect test set with zero implications if we proceed to shut them down and lock in surplus.

COMP is actually #10 on the sorted list of Total $$$ of Surplus (not percentage) and would burn 301k BNT if we were to remove all Trading Liquidity. Might be interesting for those that complained about ONLY 92k BNT getting burnt on this initial phase.

The counter argument is that PoL (Surplus) is providing trading depth for Arbs via Fast Lane.
Let’s look at the Daily Trading Fees on COMP:

we made $60 in fees once for ~$145,000 in IL-exposed TL…

Some quick data points for the Top10 USD Surplus Pools:

*NOTE: Eden skipped as API returned differing value for surplus than analytics site. So will need to verify data.

As you can see 7DayFees are not great for the amount of TL and (Total Liq - LP Staked == Surplus) could be used to burn a huge amount of BNT (and then Surplus can be used for further deficit remediation)

Quick math on the BNT Burn:
5.45M BNT burned by removing all liquidity from the Top9 (Eden excluded for now) USD surplus pools
2409 ETH in Surplus TKN left off curve

poolTokenToUnderlying: (helpful to capture actual PoL vs LP Staked after Fees)
OCEAN : 1.00159
SNX : 1.03454
YFI : 1.0459
ROOK : 1.00325
REN : 1.00604
ALPHA : 1.00059
EDEN : 1.00105
GRT : 1.01716
ARCONA: 1.02765
COMP : 1.01208


All the pools that are in surplus are on the table but we need to start small and gradual. There are 80 pools or close to that number from the analytics data currently in surplus in v3 that can have strategies created in Carbon. I think a Carbon TKN/ETH strategy is what should be done for these tokens to build up an ETH reserve that can be used to create an ETH-BNT strategy.

Since there is no rush, this proposal starts with 10 first and then we can do another 10 as part of the next proposal and slowly move liquidity between v3 and Carbon. At some point v3 will only have the pools that are in deficit and as these recover we can look at doing something similar when they get there. This process is a slow sunset of v3 from




as the v3 recovery ends and everyone can withdraw without deficit.


Thanks for putting this together. I am personally only bullish on two tokens which is BNT and ETH and nothing else. For those reasons, I think that these surplus tokens should have TKN/ETH strategies created in Carbon to receive ETH in return and later on to create an ETH/BNT strategy as I described.

I don’t think I have seen this complaint but any and all BNT that we burn no matter how small it is makes a difference in the recovery process. This proposal starts small with a subset of tokens that are in surplus so as not to rush the process and also this is contrary to the concerns that have been raised here about this being a rushed proposal. This is simply NOT a rushed proposal.

It took us 2+ years and a lot of money lost in the process to learn that fees will never overcome IL in the vast majority of scenarios. Let’s not repeat this again and utilize Carbon and its full capabilities to the DAO’s advantage.