Proposal: Whitelist Bridge Mutual (BMI) with 500K BNT Co-Investment

[MichalHerzyk]

This proposal is expected to appear on Snapshot for voting on Sunday 28 August 2021 at 12:00 pm UTC

TL;DR

• Proposal to whitelist BMI.
• Proposed co-investment of 500,000 BNT.
• Bridge Mutual is a permissionless risk coverage protocol that rewards coverage providers with BMI tokens. Anyone can provide hack/exploit coverage to Bancor.
• The Bridge Mutual community is planning to introduce token buybacks after the DAO is launched.
• Bridge provides Coverage for Bancor LPs, therefore building a relationship with Bancor is crucial.
• The protocol has been audited and has an open bounty.
• The CEO of the project is a known figure.

BMI token address: 0x725c263e32c72ddc3a19bea12c5a0479a81ee688

Website |Discord |Telegram | Medium | Twitter | CoinGecko | Youtube

Token Security

The vesting schedule can be found here: BMI Token Metrics

Project

Bridge Mutual is a platform that allows any person to create “insurance” pools for any smart contract, exchange, or service at any time. Other users can then purchase a coverage policy to “insure” themselves against hacks, rugpools, or exploits that result in a permanent loss of funds.

Bridge is fully permissionless, anyone can create a Coverage Pool for any protocol. The mission of Bridge is to become a fully DAO governed protocol in the near future.

Tokenomics

Currently, BMI is utilizing a fair launch approach, distributing tokens to liquidity providers over the next 2-3 years.

The BMI token can be used to vote on the outcomes of claims; the more tokens you have, the more influence you have on whether, and how much, the protocol will pay out to successful claimants. Voting power is also influenced by the protocol’s reputation system, everyone earns or loses reputation on the same scale.

In the near future, Bridge Mutual plans relinquish full control to its DAO structure where the BMI token will be used to vote on network changes and upgrades.

After the DAO is introduced, one of the main network upgrades that the community has been very vocal about is the token buyback and redistribution/burn of tokens (subject to community discussion).

Community and Communication

Twitter - https://twitter.com/Bridge_Mutual (41K followers)

Medium - https://bridgemutual.medium.com/

Discord - discord.gg/bmi

Telegram - Telegram: Contact @bridge_mutual (27K active users)

Available Audits

Bridge has been audited two times by reputable auditors:

• Zokyo
• Consensys (link unavailable)

Bridge also has an open bounty:

• Immunefi

Benefits for Bancor:

Bridge Mutual community is planning to implement buybacks immediate after the DAO launches, this process can be handled on Bancor network.

Moreover, Bridge Mutual currently provides coverage against protocol hacks and exploits on Bancor, there is currently over $1M in available coverage for Bancor Network, and over $30M in coverage across all covered protocols.

Users who are confident that Bancor is a safe protocol can earn up to 100% APY in BMI tokens in exchange for insuring Bancor Network.

[MichalHerzyk]

Full disclosure, I am involved in the protocol from the product side, therefore I have a stake in it.

[tenzent]

Looks like an excellent pool to me, liquidity and volume are very nice. BMI also seems to have a real great amount of volume in DEXs.

[eldude]

@MichalHerzyk - What should the fee be? I think it’s a mistake they all start a .2%.

[MichalHerzyk]

The pool already exists, I am the owner Bancor Network

I setup the trading fee on 1%, not sure if this is the best, happy to change it if needed.

[eldude]

I think 1% is a great place to start. Many longer tail tokens get great APYs like that.

[glenn]

Hi Michael,

Do you know how long the incentives for UNI LPs will last?

Also, would the team support incentivizing the Bancor pool in the future once V3 is out and we can support LM rewards on the TKN side?

Regarding the fees, I don’t think it’s wise for us to increment them to 1% as we won’t be competitive with Uniswap unless all those LPs move over to our DEX instead. That will be very difficult to accomplish given the current incentives for UNI LPs from the BMI side. We should learn from the recent ICHI experiment that high fees will price us out:

Fee Decrease Justification

The ICHI fee was increased from 0.2% to 1% in the June 10th proposal as an experiment. This resulted in a 80-90% decrease in Bancor trading volume and a lower APR for the pool. In short, the experiment failed to increase total trading fees. As a next step, we should lower the fee to be more competitive with Sushiswap, 1INCH, and Uniswap by lowering the fee to 0.3%. This is still 50% higher than the original 0.2% fee.

Note that we are already at a disadvantage in terms of gas cost due to a dual hop when coming in from ETH (makes our TX expensive). The dual hop from ETH also adds an additional .1% fee so in total we are at looking at 1.1%.

[Masa]

Agreed. ICHI APR% was dismal with 1% fees. The 0.3% fee is working ok. Yields are at least 5X more most days.

[MichalHerzyk]

@glenn

Do you know how long the incentives for UNI LPs will last?

I think as long as needed, if there is an opportunity to support BNT pool in V3 we will definitely do it. Uniswap does not provide any support so this is pretty clear.

[MichalHerzyk]

Thaks a lot for your input, I will adjust the fees than