TL;DR: Uncertain what to think about this. Favouring specific pools for direct remediation should be good for those LPs specifically, but not sure about impact on protocol as a whole vs pure BNT burn. It also sets a precedent, and one which I would argue makes any notions of bootstrapping Carbon with POL untenable.
While I appreciate the creative thinking here, I’m not 100% sure yet what my stance is on it morally, because it seems to be taking around 67% of all the fees collected to pay off pools that–given their relative deficit amounts and liquidity–were likely generating only a fraction of the fees versus the larger pools. So it seems a bit like using the bigger pools’ outsized contributions towards fee generation to specifically pay off smaller pools generating lower fees, at the expense of pure BNT reduction which should have the same deficit-reduction effect on all pools.
I say I’m not 100% sure what my stance is not as a diplomatic way of saying I disagree, but literally because I’m not certain. Does removing specific favoured pools–whilst selling off BNT to benefit them–have as much overall benefit as the universal BNT supply reduction option? We also now live in an age of BNT shorts available on Binance, so any action by the DAO which involves selling BNT should be considered extra-carefully. Uncertainty on likely impact here is not helped by the fact that current deficit percentages from the app look significantly out of step with that graphic in both directions (e.g. UOS 36.5% deficit vs 44.5%, MKR 71.9% vs 65.3, RLC 15.8% vs 28.3%, CHZ 25.3% vs 46.9% just to take the first 4 picked at random). It’s possible those fluctuations all occurred in the day since you posted this, but if so it illustrates the volatility inherent in proposals favouring specific tokens.
Another thing to ponder; given the overall deficit value of those pools, how many LPs are actually in them (i.e. what kind of average deficit value per capita are we looking at in the pools)? How many people would this action directly benefit? If they’ve got a lower personal deficit value on average, then how certain can we be this will lead to universal withdrawals (and resultant BNT burn)? Of course, everyone’s financial circumstance is different, and amount X can have a different impact on person A then person B, but given for example that the MANA pool has less than $5,000 deficit spread across $53,000 of deposits, how sure can we be that the LPs haven’t just abandoned it?
Also, according to the latest Dune data, MKR seems to be back above the cited $100,000 deficit value limit at -$106,000, so how would such fluctuations impact the execution of and calculations inherent in this proposal? If one of the listed tokens is above $100,000 value at the time the proposal goes up, it gets removed from the list and the BNT sell amount gets adjusted?
For my money, if we do this and effectively say “Its okay to a) fill the deficit by buying up TKN to backfill pools, rather than buying and burning BNT and b) specifically favour certain TKNs over others”, then there’s no justifiable way to argue against using the $4m-$6m (or $3m-$5m, or whatever the current swing is) of POL from the surplus’d pools for backfilling some of the larger pools.
The “bootstrapping Carbon with POL is the best use of those funds” argument seems predicated on increased Carbon fees and visibility helping all pools equally, but it’s definitely a much slower process than direct remediation like this. If I as an LP have seen other pools benefit from a direct TKN injection, you can bet that I’m going to want that POL used in the same way, especially if I see favouritism after more than a year of being told “BNT outperformance vs TKN is the only way to fix things, we’re all in this together”.
