Who Owns the Surplus within All Bancor Pools?

In order to us to move forward on the matter of moving liquidity from v2 to v3, Yudi commented that it is still up for debate who owns the surplus within the pools, the users or the protocol. Once we establish this, then this may be the first stepping stone in finalizing this debate.

Noteworthy to add that the bancor developers have already written the code to move all the surplus from v2.1 to v3, as this was already part of their migration plan

I personally was in the wbtc pool for a year, and with a sizeable position ( over 7 figures ). I then migrated to v3. When I migrated, I did not take with me any of the surplus that my long held position may have helped attribute towards the surplus that once was held in v2. Furthermore, my portfolio never depicted or displayed that I had any ownership of some of the surplus within the specific pool.

Therefor I am of the belief that the surplus is owned by the protocol and not its users. You and your specific LP position have never, and will never, be granted access to the surplus within the pool when you withdraw, therefor, it is under the control of the protocol and not the user.

I am requesting that everyone provide their feedback via this poll. The sooner we can come to a conclusion on this topic, the sooner we can all move forward to repairing the damage done against our beloved Bancor.

**cast your vote . leave your comments over at Proposal: Move v2.1 liquidity to v3 - #66 by infoparity **

Who owns the surplus within Bancors Pools?
  • The User
  • The Protocol

0 voters

1 Like

I feel this is not representative of the current actual discussion on V2.1 migration.

Nobody is arguing the surplus belongs to depositors.

The discussion is whether 100% of the initial deposit belongs to depositors, or if they should be forced into deficit.

I don’t believe there is much resistance on using the surpluses in V2.1 to help close the gap on V3. There is only resistance in forcing migration of positions into deficit.

as far as i understand, the issue at hand is what portion of the surplus needs to move to v3.
step 1 - identify the v2.1 withdrawal flow
when a user withdraw from v2.1, the protocol calculates the available protocol holdings and use them to cover the IL to the best ability. if needed, BNT are given.

step 2 - identify the v2.1->v3 migration flow and flaw
when a user migrated from v2.1 to v3, the contract migrated the user’s position (tkn side) and fully protected value was accounted in the staked balance.
the protocol portion of tkn and bnt that match the user’s position (assuming a withdraw), did not migrate along to v3. this created a situation where the liability was moved to v3 but protocol liquidity did not.
the result is that v2.1 seems to have surplus while v3 has a larger deficit than should actually have.

step 3 - correct the situation
from the conversations i’ve seen, it is clear that the protocol is attempting to calculate the funds that were left behind (on v2.1) and trigger a migration to v3.
once this is done, we can have another look and identify how the protocol can/should enable withdrawals on v2.1


within the v2.1 - v3 migration discussion, Yudi said this

The problem is that there’s no “correct” way to do it - this is highly subjective.
I’m not sure the community even agrees on who owns the surplus in v2.1 yet - protocol or LPs?
If the surplus in v2.1 is owned by the protocol, it makes sense that the surplus itself should move to v3 (as a matter of fact, there’s a function that does that already, since it was part of the plan, eventually - but of course things are different when BNT distribution is off).
So maybe the community should evaluate that as first step before making a wider and much more complicated decision.

so if we can all agree on who owns the surplus then this is merely only a stepping stone that we need to pass in order to move forward towards the main topic of how to handle the migration

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i do not think there is an owner to the surplus as you are trying to define one.

migration of liability did not migrate portions of the value as expected.
this was a flaw in the process which should be fix.
now, if following the correction, there is a surplus of value in the v2.1 pool, this liquidity should remain in the v2.1 pool as part of the design no?
possibly, this liquidity can be migrated to v3 based on a dao vote eventually.

I agree. This seems fair solution for both those who stayed and those who migrated. There would be also surplus attached to positions of those who have withdrawn which can help close the deficit as well.

I think we should move the discussion back to the original discussion.

Please move all discussions to the main thread:

@Jindo I will leave this open until the poll expires but will be closing this thread afterwards. If anyone wants to continue this discussion, do so in the thread above. Thanks.