So are you just waiting on stand by for someone to come up with this idea and bring it to a vote? I’m genuinely curious here, because it seems as though restoring trust in the protocol is secondary to small increases in revenue. This proposal would reduce the deficit more than any other proposal out there, and would bring a level of trust back to Bancor that is significantly needed.
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Mark mentioned on the community call that he’s working on a new thing that might generate significant revenue. I do think high revenue features should receive the highest priority.
This proposal on the other hand doesn’t generate any revenue or fees - why do you think it will reduce the deficit?
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Mark also said that revenue features such as swap fee adjustment are not going to save the protocol. Waiting for his undisclosed new revenue idea might make a difference, but how much and WHEN can it be implemented and with how much developer time? If it is a significant breakthrough, fine, but how long can we spend on something that will be so new that it requires vast amounts of CC time??
I am getting discouraged by the apparently unresolvable ambiguity of how much developer time this debt tokenization process might take. In addition, I don’t get the feeling that anything is possible as there doesn’t seem to be enough programmers to even satisfy current needs. The constant emphasis on revenue is discounting other ideas too much. We must try several different solutions in parallel to maximize our chances of success. Pinning most of our hopes on an untested new revenue stream model could, if not sufficiently successful, leave us even worse off.
I am not getting what I need from this discussion, and that is an ESTIMATE of how much time this idea, which is fairly well parameterized, will take and is it even executable. I mean, if this idea in its simplest form will take months of one or two developers time, then I need to know. I also need to know how much time Mark’s genius idea is going to take. Finally, I need to know what Mark and the CCs think of the impact of each of these ideas and can we only do one of them? There is no responsible reason to vote for this proposal, as much as I like it, without this kind of information.
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I would also like to say that the governance process is efficient and works properly when we are talking about whitelisting or changing fees, etc. This is day to day minor management level stuff and doing one does not preclude doing another.
However, when we are talking about rescuing the protocol, not only is the process made difficult by lack of information, estimates and feedback, but siloed discussions of this idea or that idea make comparisons difficult. Because we can’t do all the ideas, there needs to be a central forum to compare and rank the different ideas by effort required, overall impact, and speed of impact. We can then agree on what few ideas merit being tried first.
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But why would we wait for an idea, that has no timeline, hasn’t been revealed, still needs to be voted on, and may or may not even work?
This proposal will reduce the deficit because there will be monetary incentive to purchase dBNT. That incentive is increased by new revenue features, which I do not discourage at all. But if these mysterious features are going to be as great as you think they are, then people will purchase dBNT so they can profit from the newfound success of the platform.
This proposal will probably not save the protocol by itself, but it allows direct investment in to the success of Bancor. The deficit needs to be reduced, and this proposal aims to do that. There is absolutely no sense on waiting longer go implement something such as this, other than the time it takes to iron out details and variables, which is what should be discussed here.
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Er, if revenue and fees (income) can be used to reduce the deficit (mostly by buying and burning vBNT, I guess), then obviously the money that arrives in the protocol through the purchase of dBNT (essentially long-term borrowed money) can also be used in the same way.
I have nothing against new revenue streams, but it has yet to be shown that they will be large enough or soon enough to rescue the protocol before a bull market comes along to inflate the deficit beyond the reach of any recovery because a bull market will probably not increase the BNT price like it will with ETH and LINK. We can’t take years to fix the deficit. I believe we may need 10-20M dollars in revenue in, at most, the next year to simply show to investors that we CAN survive. This translates to a minimum of a million dollars a month in new revenue, starting today. How much revenue do we think adding Crown is going to bring in? Maybe a few thousand a month? We will need to find a hundred other protocols to get to the goal line. Can we find a hundred other protocols? I don’t know. Are there other revenue streams that are possible: derivatives, lending, etc? I don’t know. Anything complex will take months. Look at how long B3 took.
This proposal is fast, simple and has a dramatic impact. I’m not sure how much vBNT we need to burn to get the BNT price to double or quadruple, but this is the fastest way I know of to fix the deficit. I have already suggested some possible parameters for debt issuance and maturity, but they have been met with a resounding silence. I’m not going to keep beating this drum, if no one shows any interest.
It’s pretty difficult to provide an implementation estimation for rough ideas, or rather, the estimation will also be very rough.
Such a solution will probably take a few weeks, maybe a month including reviews etc.
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Your conservative estimate is half as much time that has gone by since ILP was turned off. If this proposal is implemented, the deficit will not only decrease from future revenue generation, but with dBNT purchase as well. And new revenue generation will encourage more purchase of dBNT. This approach would maximize the effectiveness of all other features implemented.
Here is another attempt at outlining the details of this proposal as I would want to see it happen.
This is a one time emergency debt sale. A dynamic ongoing solution would probably just inure us to deficit operation. It really should never be needed again in the future as the protocol should be revamped to prevent IL protection from rising to a dangerous level again.
Set a max goal of fundraising: $30M. Set intermediate and minimum goals of $20M and $10M.
Seems like $15M-- to buy and destroy 30M BNT, should be enough to repair the protocol back to pre-Celsius stability. Excess is gathered to fix further deterioration in situation or mischaracterization of how much it is really going to take to fix the problem with other market forces at work. If something is truly left over after the problem is fixed, it could also go into insurance fund for future, be used as “patience rewards” for LPs that stood by the protocol in its tough times, or be used by DAO for more developer hiring.
This is a lot like an ICO/IDO for investors, but with a guaranteed return.
Have a signaling period of 2 weeks. Need a lot of marketing before the period begins to make sure everyone knows it is coming.
People signal their commitment with a 10% deposit. This prevents malicious or bad faith participation, I think.
Once signaling period is over, if minimum goal (or better) is met, then lock all commitments. Otherwise, all funds returned.
Allow people to fulfill their commitment.
If a goal is met, allow one week to make good on other 90% of commitment, or deposit is lost.
Funds are collected in any common ethereum-based stablecoins: USDC, USDT, DAI, etc.
Mint X million dBNT to satisfy commitment amount. No further minting is possible.
dBNT will always be valued at $5. No trading or staking. It is simply a debt instrument.
Difficult part for me is setting rewards levels. Don’t want to dig a bigger hole than we are in without sufficient time for market (and BNT price) to recover and protocol TVL and fees to go up by order of magnitude.
For max goal being met: (gets us completely out of deficit trouble, we can afford to be generous down the road)
Maturity time is minimum of one year, up to 3 years. Participation and reward amounts are locked until full maturity. No partial maturity. All ROIs are locked and can’t be changed.
- One year gets you 20% return
- Two years gets 30%
- Three years gets 40%
For med goal being met: (still a good help, less generous)
- One year gets you 15% return
- Two years gets 20%
- Three years gets 30%
For min goal being met: (minimum amount that will have a significant impact, least generous because it may not save us by itself)
- One year gets you 5% return
- Two years gets 10%
- Three years gets 20%
(Rather than tiers, it could be linear or curved continuous increases ranging from min to max goal amounts. I think tiers are more motivating.)
The more you put in the better the return: tiered individual participation levels add more return.
- 3% for 1,000
- 6% for 10,000
- 10% for 50,000
As dBNT are redeemed at maturity, they are destroyed.
I have not considered many protections against gaming or harming this debt offering process. It is in everyone’s (LPs, traders, protocol) best interest to see this go through, but we will need safeguards to prevent bad actors.
All proceeds used to buy and burn vBNT (or possibly BNT as they become equal in price).
This should be enough for people to noodle about and fill in gaps. It is as simple as I can make it while preserving incentives.
Another solution is to hold on to the sales of dBNT until a certain threshold is reached, allowing for the buyback of dBNT at full price until that threshold. At that point, the funds would be dispersed to the deficit and this proposal would go in to full effect. Seems more simple this way and there is no prediction or accuracy issues.
Personally I believe the idea of a buyback pool being filled as the deficit becomes smaller is much safer and efficient approach than what you’ve outlined here, but you do raise some good points with the debt tokenization being a “one time emergency sale”. That may be the way to go.