I would like to make my position immediately clear: with the exception of Yudi (and those who echo his sentiment), every single post replying to this thread is extremely temporally inappropriate.
Right now is not the time to be talking about this. And it certainly isn’t the time to start asking the devs to hard pivot (again) into a total restructuring of a perfectly functional (albeit unintuitive) system.
After reading this thread, in its entirety, and taking quite a bit of time to create this post, let me state the obvious: Carbon, at the time of writing, has just finished its launch. The BancorDAO has been in a state of total agony for over a year as TKN and BNT lps try to march forward under the nigh-unbearable burden that was the removal of IL protection. Now, after nearly a year of development, we finally have the V3&V2 Vortex set to 90% and 100%, we have JUST finished the Bancor fastlane arb smart contract, and Carbon is fully online to buyback and burn BNT in order to fix the deficit.
Before I go on, I just want to say that I really, really appreciate this post and the effort that went into it, but now is not the time to be pushing this proposal forward.
vBNT as a governance token is functioning properly and, unlike many veTKN, there doesn’t even seem to be a general threat against the governance of Bancor. Such a system - a stable, functional one - should not be changed during a time when so many other variables have just been introduced.
With this in mind, here are some thoughts and questions that I had while reading this proposal.
- How will this change effect Bancor V2.1 and Bancor 3 over the next 2 years?
- With the removal of ILP, Bancor 2.1 and Bancor 3 will need to undergo restructuring in terms of the way liquidity provision occurs in order to stay competitive; as deficits are alleviated a very natural thing would be for LPs to withdraw as the APR provided on these pools (with 90%+ going to the vortex) is not appealing enough to risk the pools re-entering deficit. Talks of sunsetting the protocol in its current form (once the deficit is fixed) have already begun (albeit, these talks are also extremely premature). To even attempt to predict the full ramifications of such a change, at this time, is - at best - foolhardy.
- Does this make BNT a security? Exactly, what effect does removing vBNT from the governance process have in terms of regulation?
- While it may not be immediately obvious that such a thing could be a problem, I won’t waste your time by giving examples of how such a thing could be bad. And “bad” here is obviously an understatement.
- How will such a change effect governance when Carbon (and the relevant arb smart contracts if any) are deployed on other blockchains, sidechains, and layer 2s?
- Approximately 15 minutes prior to the launch of Carbon, someone in the telegram chat asked “when will this be on arbitrum?” And while I’m not sure when (or if) such action will be taken, it isn’t clear what effect this will have on the governance of future deployments.
- What effect will Carbon have on BNT and vBNT?
- Currently this question can only be answered speculatively and theoretically. Carbon has not been live long enough, at the time of writing, to do any kind of buyback. Without even preliminary data there is no way to know.
- As MBR stated “BNT burning via a Carbon-specific Vortex contract is something we can handle in isolation.”
- I think this single sentence is enough to call for this proposal to be broken up into smaller proposals. As an example for what these proposals could look like:
BIP 30 Implement a BNT burning via a Carbon-specific vortex. (MBR)
BIP 31 Change the Bancor 2.1 vortex to only collect and burn BNT. (Sylentz)
BIP 32 Pause Swapping on the vBNT/BNT v3 Vortex (and v2.1 if it still exists). (Sylentz)
BIP 33 Shutdown the Staking of BNT into V2.1 and V3 (Sylentz)
- These 4 theoretical proposals all work toward your preferred outcome (the total removal of vBNT as infrastructure) but only BIP33 would actually change the status quo for what it means to be a holder/staker/voter in the bancorDAO. BIP 30, 31, and 32 all can be implemented, observed, and iterated on without the need for a massive restructuring.
These are all very important because markets need to be stable to thrive. Each one of these proposals should be voted on in isolation with at least 6 weeks for the DAO to observe the effects and decide to move forward with any additional change.
To try and do all of those things AT THE SAME TIME just as Carbon has finally launched is a mistake.
I think there is only one logical thing to do with this proposal: table it for 6 weeks - in my world it would be more like 3 months, but 6 weeks should be enough time for Carbon to function in such a capacity that its benefits are seen somewhere in the system.
I think the best time to resume this discussion would be when new deposits start to level out.
Call to action: separate this proposal into its component pieces and move forward with discussion on each item in isolation.
If the problem is that ‘vBNT is needlessly complicated and confusing’ then we should be extremely diligent in assuring that the removal of such a feature is not even more needlessly complicated and confusing. If the size of @mbr 's posts are any indication of the complexity of these systemic changes, we should then focus on delineating this process into small, specific, and concrete proposals which benefit Bancor, Carbon, and BNT.
If any part of this proposal would be - in isolation - beneficial then it should be passed so that at each stage of the process there is as little change as possible to the system.