I’d like to first say that, overall, these numbers should be fluid depending on the needs of Balanced at any given time, APYs of different pools, etc. This is by no means a final allocation decision, but just a proposed next step.
I was originally thinking of something a bit more extreme, but I am hoping this initial proposal will be well received and we can act quickly on the vote. This proposal is about accumulating more BALN in the DAO Fund. It’s hard to see right now because of the lack of direct control by the community, but accumulating more BALN/value to the DAO fund means that BALN genuinely has more value. BALN is essentially backed by the money held in the DAO fund.
Right now we don’t have the tools in place to disburse money from the DAO Fund, but know that of course this functionality will come and that all BALN holders will be able to direct DAO funding toward initiatives such as:
- Payouts to BALN holders
- Larger bug bounty
- Smart contract audits
- Temporary incentive programs with future partners (i.e. deposit token XYZ as collateral and earn your share of x BALN per day for 1 month!)
- Receiving investment from / investing in other platforms (i.e. doing an OMM/BALN token swap with our DAO Funds to align incentives amongst the community)
- Things that we can’t think of today that become valuable/strategic in the future (can’t always prepare for everything, but DAO Fund gives us flexibility)
I want to specifically highlight what the DAO Fund really gives you is optionality & flexibility. Once BALN is given out as a reward, there’s no getting it back, but if we put it into the DAO fund we can literally do anything we want with it when necessary. Feel that BALN holders deserve a payout? We can vote on that. Feel that APY is too low on a certain pair but don’t want to pull from others? We can vote on a temporary booster from the DAO Fund.
Optionality is important, something I overlooked in the start unfortunately, but let’s try to recoup some BALN for the DAO fund and future endeavors while inflation is still high during these early days. Here is my proposed change:
|Teams that contribute to Balanced||20.0%||20%||0.0%|
This takes aware from the ICX only pool, borrowers and the emergency reserve fund to put into the DAO Fund.
Borrowers - I believe this pool is over-incentivized currently. There is already a strong incentive to mint bnUSD given that it has 0% interest to borrow, can be used to generate yield in other pools and can be used as leverage for other assets. You can use bnUSD to convert to sICX, then convert to ICX, then convert to any other yield-generating asset on a centralized exchange for net interest income (i.e. buy UST and deposit onto anchor to earn 20% while paying 0% on balanced. Borrow at 0% → lend at ~20%).
ICX-Only pool - I believe this pool is over-incentivized currently. We have never been close to running out of depth here. If we find that ICX is leaving the pool and there’s often not enough to fill demand of selling sICX then we can re-evaluate.
Emergency Reserve Fund - Currently has ~743k sICX and and ~558k BALN (link). This is used in a very rare (hopefully never) situation and I feel that it’s not necessary to allocate so much inflation there just yet. If it became necessary, we could always allocate money from the DAO Fund to the Emergency Reserve in the future.