This has been a polarizing proposal. A prominent BancorDAO member, @DarkKnight has provided a detailed overview of his objections both directly on the Discourse post, and via Twitter. Perhaps the most concerning data are those concerning the way the Eden network prioritizes transactions. The Dune query reveals a peak of only 10% of Bancor transactions actually benefiting from the prioritization, but which is currently closer to 1%. In addition to the points raised by @DarkKnight, there is also an abuse vector associated with the current Eden network implementation, as described in this Tweet by MEV Alpha Leak:
@mevalphaleak
Alpha leak for searchers seems I’m too lazy to implement this myself:
- You implement a personal converter on BancorNetwork
- Wrap all your DEX-arbs using this converter so that tx[‘to’] = BancorNetwork
- You’ll get 28% of DEX arbs for free without paying any bribe to miners.
I previously engaged with the community over how the Automaton would be likely to vote, via the thread on @DarkKnight’s Twitter (here, and here). In short, I have said that so long as there is a demonstrable benefit to the health of the protocol (e.g. increased trade volumes), then a liquidity mining proposal would be supported; the Automaton is apolitical, relatively impartial, and should be as predictable as possible. This is an interesting case, because at face-value the value to the protocol is clear. However, the points raised by @DarkKnight certainly call some of that benefit into question. Moreover, the “expected” behavior of the Automaton, in light of these criticisms and considering its conservative leanings, could be argued to be AGAINST. But is this a subjective decision?
The voting rules are due to be updated this week - both for co-investment increases, and now liquidity mining proposals. Using @DarkKnight’s example, there will be a new condition that if there is any credible, data-oriented arguments raised against a liquidity mining proposal with sufficient time for the proposal author to respond, AND if those specific concerns are not addressed on the proposal’s Discourse page prior to the vote being live, the Automaton will vote AGAINST by default.
It is important to understand that whatever the Automaton does, it is not a judgement against the EDEN project, or its team. In terms of engagement and potential collaboration, the EDEN team have proven highly dependable. Caleb from the Eden network has been a guest on our community call two weeks running, and has responded well to questions. I personally think that the problem of MEV is one worth addressing, and the solution offered by Eden is among the most user-friendly, passive technologies on offer. Thus, the complicated nature of the Automaton’s voting decision is realized. Given only the information presented in the proposal, what would a reasonable person expect the Automaton to do, given the description I have provided for its behavior?
- The proposal in absolutely bare bones; 2 sentences and 3 dot points.
- Despite the minimal nature of what is presented, no supporting arguments are provided whatsoever.
- However, the author has followed-up with an additional 6 dot points in response to @DarkKnight’s critique. Importantly, reference to trading volume is included for the first time (why wasn’t this part of the orginal proposal!?). The other comments are well communicated and could certainly be judged an adequate response.
There is no good answer. When in doubt, and in-line with the Automaton’s stated conservative liquidity mining politics, the default is clearly a vote AGAINST. This will serve as an important precedent, and help to refine the Automaton’s behavior. If any community members feel strongly that the Automaton did something unexpected here, I am very interested to hear from you.