Votingautomaton.eth

Proposal: Incentivize users to migrate to V3 by matching token side LM rewards with up to 50,000 BNT per pool

As per the Automaton’s established, conservative voting behavior regarding liquidity mining:

if PriorLM == False and StrategicPool == True:
FOR
Elif PriorLM == True and TKN == 'LINK', 'WBTC', 'ETH', 'USDC', 'DAI', 'USDT':
FOR
Else:
AGAINST

This proposal is quite generic; there is no list of eligible TKN provided, nor is there a maximum BNT emissions schedule. This and other ambiguous details, including the dates (and no description of why they were chosen), the 50,000 BNT limits (and why this number is non-negotiable), what “matching” token side LM means (e.g. denominated in USD? when and how is this calculated? is it dynamically adjusted?), make the proposal seem half-baked. This is a complex proposal, and requires a great deal more detail than what was provided.

The automaton will vote AGAINST the automatic provision of BNT rewards to any token.

Proposal: Increase trading liquidity on CEL-BNT pool to 1M BNT 5

The comments raised by @CoinAnole are mostly aligned with the Automaton’s risk aversion regarding the CEL token, specifically. Celsius is amidst uncertain times - three of their executives were recently arrested, and they were greatly affected by the security breach at BadgerDAO. For clarity - there is absolutely no reason to suspect that Celsius and its current team members are anything less than world-class. The Celsius product is terrific, and I have great respect for the team. There is little doubt that their continued presence in DeFi will be a strong positive for the industry. All of that said, is this the best moment to be increasing the trading liquidity for the CEL token? Certainly not.

The Automaton will vote AGAINST increasing the CEL pool as the short-term risk seems too great. However, long-term, CEL is less concerning. An increase in trading liquidity should be discussed again in the future.

Proposal: Onboard SHIBGF with 30K BNT Trading Liquidity 2

The Shiba Girlfriend team have been supportive on Twitter (see: here, here, here, here). Sentiment is overwhelmingly positive(see: here, here, here, here, here, here, among many others).

SHIBGF is a meme token; it has no concrete financial or economic purpose, but rather draws it value from societal and cultural sources. Which is not to say that the token has no purpose; some meme coins truly are without meaning, but Shiba Girlfriend represents female empowerment in STEM fields, with a strong emphasis on programming. The project provides financial support to women’s programs around the world, apparently with funds obtained from the Shiba Girlfriend project. Therefore, the token does have an interesting use case a type of crowd-sourced philanthropy. It is possible that the template could provide a generic solution for other charities to follow.

SHIBGF is difficult to manage from a whitelisting perspective. Tokens belonging to this category have a history of increasing in value parabolically, or exponentially compared with the rest of the market; 1000× value appreciation is not unheard of. As such, meme coins are a catastrophic IL risk to the Bancor protocol. However, some of the features of Bancor3 make these risks more tenable. Importantly, SHIBGF is the first proposal to formally acknowledge the external IL protection in a proposal, and seek to utilize it. Further, the team is providing their own incentives on the pool: SHIBGF liquidity providers will receive auto-compounding rewards in the form of SHIBGF. Therefore, from both an incentives and IL cost perspective, supporting the asset is made considerably easier for the BancorDAO.

Importantly, the requested BNT funding (30,000) is very reasonable, and well-suited to the market capitalization of the SHIBGF project. The token distribution is excellent.

The Automaton will vote FOR the whitelist status of SHIBGF, to begin with the release of Bancor3.

1 Like

Proposal: Onboard Cartesi (CTSI) with 50K BNT trading liquidity limit

The obligatory Tweet has been confirmed. Receptions has been positive.

Cartesi is an operating system that incorporates standard programming environments such as Linux onto blockchains. The idea is to allow for smart contracts to be created with the support of existing repositories, such as the vast catalogue of tools used in C and C++. This could make it easier to develop Dapps, although it is not clear to me the precise manner in which the Linux VM communicates with the Ethereum VM. It is a compelling idea nonetheless, and I am simply going to assume the project has an implementation that addresses possible security risks and other oversights that are deeply smart contract-dependent. Cartesi claims to be blockchain agnostic, which is critical for the type of product it is developing. The value proposition for the project is beyond question.

The CTSI token is a utility token, and is used in a PoS consensus mechanism on its own network side-chain. As a side note, the node runners are apparently randomly selected, which is a potential weakness in the system, but not a big concern for whitelisting the token. CTSI is also paid by network users to write data to the blockchain, and also plays a roll in the Descartes Rollup system - a modified optimistic rollup implementation with an interactive dispute resolution (still in alpha). The Cartesi announcements channel on Telegram is fairly high quality, and the level of transparency there is admirable.

The CTSI token poses no apparent security issues; it is a standard erc20, and the normal locking and staking contracts aside, the token appears fairly well distributed. Audits have been completed by Certik and Slowmist. Exchange liquidity exists for CTSI on Binance and Coinbase, Kraken, Huobi, KuCoin, Gate.io, as well as some DeFI protocols, including Uniswap v3. The requested BNT funding is reasonable (50K).

The Automaton will vote FOR the whitelisting of CTSI.

1 Like

Proposal: Onboard Sheesha with 50K BNT Trading Liquidity Limit

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.

1 Like

Proposal to activate LM rewards on the SFI-BNT pool in exchange for SFI buybacks

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.

The Saffron.Finance counterpart to this proposal can be viewed on their own discourse page; the proposal has not yet appeared on their snapshot governance page. The saffron.finance Twitter account publicized the proposal, to a positive reception.

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.

Proposal: Increase INDEX trade fees to 0.5% on Bancor3 only

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.

Proposal: Increase the trading liquidity limit in the ENS-BNT pool to 200K BNT

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.

Proposal: Change the fee in the OCEAN pool from 0.2% to 0.5%

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.

1 Like

Proposal to whitelist AST with 50,000 BNT trading liquidity limit

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.

The Airswap Twitter account has acknowledged the proposal.

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.

Proposal: Change the fee in the ZCN pool from 0.2% to 0.5%

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.

Proposal: Increase Trading Liquidity to 300K BNT on DDX (DerivaDAO) Pool and Set Pool Fees at 1%

The $DDX token was only recently added to the Bancor whitelist. The results on Snapshot were unanimous; 100% in favor of the whitelist, and 45.7% quorum.

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.

Proposal: increase the trading liquidity limit in the TRAC pool to 1M BNT
Proposal Addendum: Incentivize users to migrate to V3 by matching token side LM rewards with up to 50,000 BNT per pool
Proposal: Change stablepool fees USDT/USDC/DAI to 1.0%, 1.0% and 1.5%, respectively
Proposal: Whitelist PHTR token with 100k BNT co-investment

The Automaton is voting FOR all of these (sorry for the delayed post). PHTR has done a terrific job promoting the proposal and their pool on Twitter (see here, here, here, here, here, here).

1 Like

Proposal to Whitelist Poolz Finance (POOLZ) with 50,000 BNT co-investment

The Automaton is waiting for the POOLZ main Twitter account to acknowledge the proposal.

Proposal to Whitelist Digital Fitness (DEFIT) with 50,000 BNT trading liquidity limit

Tweet confirmed. Token security looks great, distribution is better than most. It’s a unique use case for cryptocurrency, and seems to have a healthy community. The Automaton is voting FOR.

Proposal: Whitelist Streamr Network (DATA) with 50,000 BNT trading liquidity limit

The Automaton is waiting for the DATA main Twitter account to acknowledge the proposal.

Proposal to increase the trading liquidity limit in the WOO pool from 750k BNT to 1M BNT

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.

Create pool for the new Reserve Rights (RSR) token contract with 750,000 BNT trading liquidity limit

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.

Proposal to increase the trading liquidity limit in the CHZ pool from 20k BNT to 50k BNT

Small increase for a solid project with a growing community. The Automaton is voting FOR.

Proposal: Increase ICHI trading liquidity to 1M BNT from 750k BNT

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.

Streamr Network tweet confirmed.
Still waiting for Poolz.

Proposal: Increase space in the SNX pool from 5,000,000 BNT to 9,000,000 BNT

The automaton will vote FOR increasing the funding limits on SNX.

Proposal to increase the trading liquidity limit in the DAO pool from 100k BNT to 200k BNT

The automaton will vote FOR increasing the funding limits on DAO.

Proposal to gradually increase the trading liquidity limit in the wNXM pool from 2M BNT to 10M BNT in 1M BNT increments

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.

Proposal to increase the trading liquidity limit in the SHEESHA pool from 50,000 BNT to 250,000 BNT

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.

As a general note, the Automaton is supporting most proposed fee changes by default; a data and analysis category has been established to help with visibility on these studies.

Proposal: Change the fee in the vBNT pool from 0.75% to 1.5%

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.

Proposal: Change the fee in the REQ pool from 0.2% to 1.0%

The automaton will vote FOR the proposed fee change.

Proposal: Change the fee in the MTA pool from 0.3% to 1%

The automaton will vote FOR the proposed fee change.

Proposal to Whitelist Silo Finance (SILO) with 50,000 BNT trading liquidity limit 4

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."

The Automaton will vote AGAINST.

Proposal: Increase TEMP trading liquidity to 500k BNT from 100k BNT 4

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.

1 Like

Proposal to Whitelist Signata (SATA) with 50,000 BNT trading liquidity limit

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:

  1. 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.
  2. 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).

2 Likes

Hi @cl-tim! I am glad to have you commenting in our governance proposals :smiling_face_with_three_hearts:

Indeed, the Signata official Twitter account has acknowledged the proposal.

That’s my mistake - thank you for correcting me. This is a significant change, and goes a long way to alleviating the concerns I raised. In this case the Automaton will change its vote to FOR.

I would like to keep in touch - perhaps we can set up a call to discuss Bancor V3, and all of the ways our DAOs can work together to help maintain healthy liquidity for the SATA token.

Thanks again for being an active participant on our governance channels - I sincerely appreciate it.

Proposal to Whitelist Smart MFG (MFG) with 50,000 BNT trading liquidity limit

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:

image

  1. 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.
  2. 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).
  3. 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:

image

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.