I propose the Bancor protocol expanding its offering into collateralized lending with the “staking” of a whitelisted (or other agreed upon TKN). This would work very similar to another “very large Defi competitor” in that a customer can stake their coins and then based on an agreed upon loan to value % receive vBNT tokens. These tokens can then be used to swap into any coin they desire that is offered on Bancor. This pool would be created from vBNT holders staking into a separate pool segregated from LPs. This pool would be used to provide tokens in exchange for staked collateralized assets. The interest earned and liquidated assets would offer the APY to those vBNT stakers in the vBNT Collateralization Pool (VCP). These TKNs then must be swapped immediately into another coin of their choosing (This immediate swap will be tracked to ensure fees are earmarked to the VCP stakers). The loan is perpetual and must be paid back in vBNT (which will generate another swap fee) to unlock the collateralized assets.
The benefits to BNT holders (and Bancor DAO) would include:
- Establishing another use case for vBNT offering a pathway to leverage which increases demand for BNT (and for BNT to be staked to receive vBNT, which would apply buying pressure to BNT tokens in the market).
- Gives long term BNT investors an additional revenue stream in the form of interest income from loans , transaction fees, and liquidation fees. These revenue streams diversify BNT stakers and insulate them from being solely dependent on swaps and LM rewards
- Establishes Bancor as a one stop shop for low fee swaps and collateralized loans which adds value to the BNT token.
- vBNT burn algorithm must be activated for this to make sense for stakers interested in the VCP. The vBNT/BNT exchange rate needs to be close to 1:1 for this to make sense considering the gas fees and potential delta risk if BNT TKN appreciates in value quickly.
This is a crude outline so far, but I think most should get the general idea.
Let’s dialogue Bancorians.