The Sheesha Twitter account has done an excellent job promoting the proposal(see: here, here, here). They even went to the effort of creating instructional tweets on governance participation (see: here, here, here). Absolutely exemplary.
Sheesha is a mutual fund. The SHEESHA token is part of a rewards and staking mechanism. It’s not entirely clear how the performance of the fund is connected with the SHEESHA token; the lite paper discusses diversified portfolios and other things, but never addresses how the SHEESHA token is involved. This is potentially an issue, albeit a small one (relative to crypto norms). The token itself seems harmless, and the requested funding is relatively small.
The Automaton will vote FOR whitelisting SHEESHA; however, the pool should probably remain small. The Automaton is unlikely to support a proposal to increase the available trading liquidity until the role of SHEESHA in the fund is better established.
This proposal is among a family of similar proposals, such as those affecting $FARM, $eRSDL, $APW, and $MKR (although the proposal for MakerDAO was deprecated before a vote). The strategy has legs - the $FARM pool on Bancor now commands ~90% of the total liquidity on Ethereum.
It should be noted that the pool depth, at present, is a little lackluster. However, this is an unconvincing reason to deny an incentives campaign, as the desired outcome is to improve liquidity. Further, the wording of the proposal is critical:
This is an exchange - liquidity incentives for being the target of SFI buy-backs. Therefore this proposal is contingent on saffron.finance governance agreeing to orchestrate the buyback this way. The Automaton will vote FOR this proposal, but will not vote to renew the incentives, consistent with its prior established behavior.
The effect of fees on the health and sustainability of the system is the focus of an active investigation. However, the present proposal asks only to increase the fee to 0.5% following the release of version 3. The Automaton will vote FOR the fee increase.
Increasing the single-sided capacity at this stage is sensible. The ENS token has had a little time to settle down, following its mass distribution via an airdrop at the end of last year. The proposal seeks to increase the BNT funding from 50k to 200k, or 4×. This is on the extreme side, but the total funding limit is commensurate with the size and popularity of ENS. Moreover, a community member has asked if the ENS treasury would consider establishing an LP position on Bancor:
This is an interesting possibility, but likely unnecessary. If the pool is to increase its capacity again in the near future, establishing a dialogue with the ENS community either on their own governance pages or through any other means, ought to be made a high priority.
The automaton will vote FOR the increase in BNT funding for the ENS pool.
The discussion on the OCEAN fee change is interesting.
These types of analyses are helpful for determining the likely effect of trade routing, and the $OCEAN token is a fairly compelling one to examine further. The current status of the fee optimization experiments suggest that trade routing is a secondary priority; however, we have primarily examined tokens for which Bancor has established a commanding lead in relative liquidity share. Something like $OCEAN is slightly better distributed, and could behave differently. In any case, it is worth determining.
The automaton will vote FOR the proposed fee change on $OCEAN.
Airswap is building infrastructure to connect traditional markets with DeFi, and the $AST token is a governance token. There are no apparent concerns with the security of the erc20 contract; however, the distribution is very concerning.
About 66% of the token supply is in a state of quasi lock-up. In this case, lock-up refers only to the fact that these funds cannot be used without a DAO decision; the core contributors cannot do anything with these funds without consent of the community. This is not nearly as good as it sounds. For example, the AirswapDAO could volunteer a large proportion of these tokens as a bribe to the curve ecosystem, or similar, which is akin to dumping them on secondary markets. Luckily, the proposed BNT funding is fairly small, 50K, and would have little or no observable effect on the protocol’s health even if such an event occurred.
Close attention should be paid to $AST, and how its DAO decides to use the 66% of the token supply that is currently allocated to nothing. The Automaton will vote FOR this proposal, but increasing the pool further should be carefully managed. For example, it may be worth opening a dialogue re: the external liquidity incentives and external IL protection offered on Bancor3. If the AirswapDAO could contribute even a tiny fraction of this token supply for such purposes, the distribution would be improved, and in the case of applying them to external IL protection, the risk to growing the pool significantly larger is reduced.
As mentioned above, the current fee changes being explored by the BancorDAO have yielded very positive results when the fee is increased, mostly negative results when the fee is decreased. The proposed change from 0.2% to 0.5% is reasonable. The Automaton will vote FOR a 0.5% trading fee on the ZCN pool.
The $DDX token has a fairly good distribution profile, and maintains a 10-year incentives plan for exchange liquidity rewards for token holders. Therefore, the distribution is expected to continuously improve with time. this is an important consideration, as the asking amount, 300k BNT, is high for its market metrics:
The proposed fee change to 1% is reasonable given the current climate.
The automaton will vote FOR the increase; however, a dialogue should be opened with regards to establishing Deriva’s own incentives on V3, and external IL protection, given the size of this pool.
WOO are best friends; the Bancor community loves the WOO team, the project, and its community. More importantly, the WOO token looks to have stabilized, a 30% increase in the pool depth is well timed leading up to the release of Bancor3. The Automaton is voting FOR.
This is more of a formality. The RSR token was recently migrated to a new contract; the token security has not changed, the project has not changed. If the old RSR token was whitelisted, this one should be too. The Automaton is voting FOR.
The ICHI project has been gaining traction of late. It is becoming one of the more liquid governance tokens in the industry, and rightfully so. The ability to create and manage a stablecoin from a basket of USDC and a volatile cryptocurrency is a terrific use case. ICHI is among the most secure and financially sound stablecoin projects in the industry. The Automaton is voting FOR.
The automaton is voting FOR increasing the funding limits on wNXM. Importantly, the gradual increase is a significant component of the decision in this case. This is a large change, and it is probably a bad idea to commit to it all at once. Further, this proposal is part of an inter-DAO discussion with Nexus Mutual, regarding liquidity support for wNXM. These kinds of collaborations are positive for the industry overall, and help to support the DAO-owned liquidity narrative that strengthens Bancor’s mindshare.
This is a very large change (5×). The pool was only recently whitelisted, and it could be premature to commit this much liquidity at present. There is nothing apparently suspicious about the project, and the team has been incredibly proactive in supporting the pool on Twitter. Demand for staking seems natural. The automaton is reluctantly voting FOR this increase in funding. This example has reminded me that the automaton voting rules are overdue for an update. After B3 is released, I will revise the funding limit increase logic to help make the automaton behavior more predictable. Arbitrary 5× increases is probably still within reason, as the pool is small to start; however, a more precise decision making process on behalf of the automaton is certainly warranted.
The vBNT pool is unique; it is the engine that drives the Bancor Vortex, while also providing the means to access a type of “fast credit” for BNT liquidity providers. The fee on this pool therefore affects both the protocol, and users to a similar extent. From the protocol perspective, the change is relatively benign. Although its ability to purchase vBNT is slightly encumbered, since it is itself a participant, the change also represents an improved ability to capture BNT directly. For the liquidity provider, it is a positive change. For the swapper, the change is noticeable, albeit minor. On balance, the proposal to change the fee is acceptable - and could be grounds to increase the funding on the pool in the future.
The counter-argument is that very few individuals are likely to benefit. The vBNT pool is among the most exclusive in the network. After speaking with members of the community, it seems as though speculation on the vBNT token itself - as opposed to its intrinsic vortex, or governance use cases - is potentially harmed. It is an awkward dichotomy.
Given the nearly uniform opposition to this proposal, as voiced by those who have reached out in private communications, the Automaton is voting AGAINST this fee change.
At the time of writing the Silo Finance main Twitter account has not yet acknowledged the proposal. More importantly, Silo Finance is heavily exposed to inflationary rewards programs such as those offered by the Convex/Curve ecosystem. It is poor timing for a whitelisting proposal for $SILO. The project itself is not dependent on these kinds of inflationary rewards; Silo Finance creates isolated money markets. The following activity is what is concerning:
" On Friday $CVX price declined, offering a good entry. Knowing that buying with treasury would take 10 days, we decided to buy with dev fund and ask the DAO to reimburse it."
This is a large increase. The anecdotes provided by the Tempus co-founder and BD team, are worth taking into consideration:
As DAO liquidity provision on Bancor is likely becoming a key component of the narrative as the project moves into V3, this proposal has a high degree of confluence for both communities. The Automaton is voting FOR the increased capacity of the pool on v2.1.
Signata is a service provider that seeks to decentralize digital identity management and authentication. It is a product of Congruent Labs, an Australian startup with a focus on cyber security. Neither of the Congruent Labs or Signata Twitter accounts have yet acknowledged the proposal. In fact, the Congruent Labs Twitter account has been inactive for almost a year.
The SATA token is used to access the Signata service. It should be noted that the whitepaper makes frequent reference to a type of hardware device called a “YubiKeys”, a product of a separate company, yubico. The relationship between Signata and yubico is unclear. The yubico website states that: We are more than 300 people, representing about 30 different nationalities, and based in eleven countries; Sweden, USA, Germany, UK, France, The Netherlands, Chile, Argentina, Canada, Australia and Japan. This very well could include the Signata founders, but I can’t say for certain. If they are unaffiliated, then it should be noted that the strength of the Signata project is at least partly predicated on the success of the YubiKeys product, at present.
The timing of this proposal is potentially problematic. Roughly this time last year, the SATA project created a token lock-up program, while incentivizing Uniswap LPs via an airdrop mechanism. In and of itself, this is hardly an issue; however, the time wherein this proposal is being considered marks the end of a slow crescendo in token unlocking. The problem is that at present, there are just shy of 20,000,000 SATA tokens in circulation, whereas the unlocking schedule today suggests that number could increase by at least a factor of 3×, assuming those with the privilege to do so decide to unlock the tokens to which they are entitled.
Certainly, this may be motivating the project to establish a more robust liquidity base. It should be noted that the amount requested is relatively minor - 50k BNT would allow for a pool of approximately $200,000 depth, and alongside Uniswap v2 and v3, and Sushiswap, will give Bancor approximately 20% of the market’s SATA liquidity, and increase the available SATA liquidity by approximately 25%.
The SATA founder is the proposal’s author, who responded to a community member’s question about the team contributing liquidity directly to Bancor:
Given the timeliness of the proposal with respect to the token unlocking environment, this collaboration ought to be encouraged. The Automaton is voting AGAINST at present; but not without a recommendation for a follow-up proposal:
The Signata team is encouraged to read the proposal from the SHIBGF team. A commitment to support their own liquidity incentives with external IL protection would make for a much more palatable whitelisting process.
If a similar arrangement can be made, (and provided the proposal is acknowledged on Twitter), then the Automaton will vote FOR in the next proposal.
Twitter accounts have yet acknowledged the proposal. In fact, the Congruent Labs Twitter account has been inactive for almost a year.
We were unclear if we should publicly acknowledge the vote unless Bancor did, in case it wasn’t meant to be publicized - we have done so now on the SATA twitter account. We have added staff to the project marketing team to start posting more regularly, but will likely consolidate the accounts to simplify the management as we already know multiple accounts is just unwieldy when the content all comes from a single source anyway.
We recently announced a Signata Identity Group (Announcing the Signata Identity Group) - this is part of this consolidation effort underway to centralize messaging for the project and community it’s building.
The relationship between Signata and yubico is unclear
Yubico is their own entity. We are registered on their “works-with-yubico” service but only as a self-asserted service. Our goal is to just use their product as intended - open standards (PIV CCID cards) and open protocols, but our products are not exclusively dependent on them. We are building everything for web3 to add YubiKeys as an addon, not a prerequisite. Our real goal with using YubiKeys is to simply offer a cheaper alternative to products like Ledger’s and Trezors.
The problem is that at present, there are just shy of 20,000,000 SATA tokens in circulation, whereas the unlocking schedule today suggests that number could increase by at least a factor of 3×, assuming those with the privilege to do so decide to unlock the tokens to which they are entitled
The picture referenced is out of date. I’m guessing it was found from older blog posts, but anyway the project has changed to move the remaining uncirculating tokens into a DAO instead. There’s a mention of this in this blog post: Signata Project Update - September 2021 - it has to be taken at face value for now until the DAO is live and the tokens are moved into the DAO contract. The team is working with the AGFI project as their DAO is currently being audited (Aggregated Finance - CertiK Security Leaderboard) and the SATA DAO will be established as a fork from that audited DAO contract (which is predominantly derived from the Compound Finance DAO).
Smart MFG is a diverse project. The project marries NFTs with digital design and modelling, manufacturing, hardware and supply chain tokenization, and their website has an active NFT marketplace with content curated from a handful of early access creators. There is a lot here, spanning the full spectrum of hard utilitarian NFT philosophy, to collectible artwork and gaming aspects of the technology. The main MFG Twitter account has acknowledged the proposal is live. Moreover, the MFG token has been part of the Bancor ecosystem since 2018.
The role of the MFG (ERC20) token is not entirely clear. The text in the proposal is taken verbatim from the website, which is unfortunately not very helpful:
Incentives. The MFG token will be used to incentivize new businesses to adopt their on-chain supply chain solution, and to incentivize users to provide liquidity with it.
NFT marketplace. I would have thought this implied that the MFG token is the default currency of their NFT purchases, but this is apparently not the case - an NFT called " Galactic phantom" is currently being auctioned for 1.25 ETH (i.e. not MFG).
The Vague Stuff. The supply chain tokenization is underscored with “NFT” in parentheses, suggesting this is not related to the MFG token. Supply Chain DeFi is mentioned, but it is not clear how the MFG token is part of this vision, or why it is necessary. The payments part is fine, but almost all ERC20 assets can fulfill that need.
Nothing here is too concerning given the requested BNT funding. However, before a trading liquidity increase is considered, there should probably a discussion in a public forum to discuss the MFG token and its purpose. The MFG liquidity mining campaign on Uniswap is also ending imminently:
The liquidity on Uni v3 may not be so sticky after the rewards period has ended; if there are liquidity providers who remain bullish on the MFG token after the period completes, it may not be too difficult to encourage them to grow the pool on Bancor with IL protection. Further, I would be interested to know if the project founders are interested in supporting their community with external IL protection on Bancor 3, and/or an auto-compounding rewards program over a longer period of time.
On balance, the MFG token is a reasonable whitelisting option. The distribution is better than par, the token has a long history, the team and project are high quality. This strikes me as a potential collaboration that the Bancor DAO would be excited to support. When asked about staking treasury assets, the author of the proposal replied:
The Automaton will vote FOR the whitelisting status of MFG.
The PHTR pool requires some commentary. It was first whitelisted in January with a 100K BNT funding limit; the proposal was authored by @Oliver, a co-founder of the project and the head of product development. The vote was passed with a 72.96% majority and 52.06% quorum.
Not quite a month later, a second proposal appeared from @Oliver seeking to 4× the trading liquidity with an increase in the funding limit to 400K BNT. The vote passed with a 100% supermajority and a 50.91% quorum.
This proposal seeks to 2× the trading liquidity, marking an 8× increase since the original 100K BNT funding limit included in the original whitelisting proposal, in less than three months. While not alarming in and of itself, it is a good moment to pause and reflect on the health of this relationship. I want to draw attention to the rationale offered by @Oliver in the new proposal:
There are some important take-home messages contained within this section:
PhutureDAO has identified Bancor as both its primary liquidity provider, and treasury management solution.
PhutureDAO requires a well-established liquidity base from which to build index products, and other financial instruments.
PhutureDAO recognizes the value of IL protection as the only effective way to maintain a buy and hold return profile, while maintaining liquidity for the PHTR token.
The necessity of the insurance payouts to be taken in BNT if PHTR diverges in price to the upside, is acknowledged, and treated with respect. BNT is identified as being an easy token to handle, due to the magnitude of its on-chain liquidity and distribution.
These are strong anecdotes in support of PhutureDAO’s knowledge and understanding of the Bancor product, and its utility to their project. Although the pool has grown much faster than I expected it to in when considering the whitelisting proposal in January, the momentum is justified. Sentiment is positive; users on Twitter from both communities have posted about the developing dovetailing of our project’s goals (see: here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, and so many more).
The Automaton will vote FOR increasing the BNT funding limit of PHTR.