Proposal to Use POL to Reduce B3 Deficits

Proposal to Use POL to Reduce B3 Deficits

Expected on Snapshot on November 5th, 2023


Four Competing Goals Being Discussed In Public Telegram Chats and Discourse

We have about $3M of POL that many in the DAO would like to use. However, there has not yet been significant discussion as to what the goal is.

Potential Goal 1: Reduce the overall B3 deficit. This discussion is here.

Potential Goal 2: Reduce the supply of BNT by using the POL to target 4 specific pools. This discussion is here.

Potential Goal 3: Bootstrap Carbon. This discussion is here.

Potential Goal 4: Save the ETH for a rainy day

I’ve been very honest with my personal perspective.

  • I’m very much aligned with potential goal 1.
  • I understand the appeal of potential goal 2, but I personally prefer a solution that treats all LPs the same regardless of the TKN they LP with.
  • I understand the appeal of goal 3, but trying to manage an active strategy in a decentralized fashion via public functions will not be easy - and this comes with dev time. Also, we may not be able to respond quickly in the case that one of the TKNs held by the strategy has some issue - as our governance takes time.
  • Goal 4 is also interesting. Perhaps good things come to those who wait.

Reduce the Overall B3 Deficit with a Modified POL Contract: Related to Goal #1 - Overall Deficit Reduction

(note: the original POL contract is outlined here)

  • Create a public function anyone can call that will put 100 ETH up for sale.
    • 100 ETH is a DAO controlled parameter
  • The initial sell price should be set at two times the BNT/ETH rate on CG.
    • This is a DAO controlled parameter
    • At the time of writing, the rate is about 1 ETH to 3,000 BNT
  • Contract offers to sell ETH at initial sell price
    • For example, there are 100 ETH and initial sell per ETH is 6,000 BNT
    • Any user can send 600,000 BNT to acquire the ETH
    • The price of ETH drops as defined by an exponential decay formula with a 10 day half life.
    • Anyone can buy the ETH with BNT at any time.
    • These BNT are sent to the token contract
    • These parameters can be adjusted by the DAO
  • Once a trade ends and there are less than 10 ETH available for sale, the contract is topped up to 100 ETH.
    • The new initial sell price will be the price of the last ETH sold x 2

This system was presented with more detail and graphically here. Please note that numbers might not be the same.


Use POL to Reduce B3 Deficits as outlined above


Take no action


I am personally a big fan of this proposal and plan on supporting it.


I support this plan. Reducing the deficit and treating all LPs fairly are two things I personally feel very strongly about and will vote in favor of.


If proposal 1 passes, roughly how long will this take to put together? ( ballpark it )


Adding an illustrative example here, as an appendix to the scenario I described in a comment to the alternative proposal.

Only major difference: min ETH offer is now 10 ETH, instead of 50 ETH (i.e. restart the auction after 90% depletion of the auction ETH reserve, instead of 50%).



In favor. Is there a reason why we can’t put this up for a vote this Sunday 29th of October?


I prefer the DAO take time to evaluation this and Alpha’s proposal and then vote on them at the same time.

1 Like

Totally for this.

And since this has to be a minimum of 20 characters:

Good to mentally add on value captured by the Arb Bot during this whole process similar to the POL acquisition process.


Definitely support this much more than the other proposal; this could actually help alleviate the deficit, whereas the other only serves to maintain the POL ETH amount for as long as possible, at the expense of TKN LPs.


With this and Alphavillion’s proposal now going to a vote I’m wondering how long it would take before one of these can be implemented after voting closes Wednesday? Any dev that can give an estimate for both proposals? Cheers.


With the vote ending soon. Any dev that can answer this question?

1 Like


Sorry, missed it - the implementation isn’t very complex, given that it’s relatively similar to the current POL contract implementation.
I imagine any of these can go live within 2 weeks post vote end.


Thanks Yudi. I think a lot of us would be very happy to see this go live asap. Thanks


@yudi - just following up to see if we can get an update seeing as we are now about two weeks out. Thanks.


Hey - development is done and it’s now under testing - I believe it requires about a week until it’s gonna be live.


During testing does the code get audited by anyone outside of Bancor?


Not an official audit but we have one auditor outside bancor who’s reviewing the code.


It’s a week later. Any update @yudi?


Quick update.

The contract and testing of the contract are now complete.

Yesterday the following update was posted in Bancor devs (Telegram: Contact @BancorDevelopers):

Once people have had a chance to upgrade to the new bot and the contract changes are made, the process can start with full bot support.

More details on the bot: Major Update - handles upcoming changes to the Fast Lane smart contract by Lesigh-3100 · Pull Request #237 · bancorprotocol/fastlane-bot · GitHub


So, any update on this?