Hey Markus - thanks for sharing more info and I’m sure I speak for the Balanced community when I say that I appreciate your support on both Balanced and ICX as an ecosystem.
I want to take a few minutes to elaborate on two main topics.
1.) Governance process
Unfortunately, our current voting system is discrete votes; Yes/No on a rigid allocation of inflation. In the future (hopefully middle of next year) we’ll have what we’re calling “live voting”. This is how Curve pools work. People fight for veCRV voting power for their pool to maximize the CRV allocated to their pool.
If Balanced worked like CRV with live voting, you would simply be using your bBALN to vote to allocate more inflation to the USDT/bnUSD pool since you are a heavy LP there.
The reason I pointed out that the current system leads to more frequent on-chain votes was to point out that you can submit a vote in the same fashion as BIP13 to allocate a bit more inflation to the USDT pool since you have an incentive to do so. You could start a discussion or just submit the vote like what was done in BIP13.
2.) Logic behind BIP13
From a game theory perspective, of course BIP13 doesn’t make sense for you as an LP of the USDT/bnUSD pool, I would never argue against that, but I figured I’d point out the benefits BIP13 attempts to achieve anyway. Also, to be clear, I didn’t propose BIP13, so this is based on some of the Discord discussion i saw and my own speculation of what could be the reasons.
The benefit is that BIP13 should lead to more volume on the DEX. USDT had the most TVL by far, but was generating as low as double digits of volume on a daily basis when I would check. It has generated very little income for Balanced DAO and BALN stakers relative to the other pairs. It unfortunately appears that very little full-circle arb trading is profitable, or at least not profitable enough to warrant the hassle. I hoped that adding the USDT pair would help stabilize bnUSD, but I can admit that my theory was flawed. Curve-style pools and enhancements to rebalancing are the main answer long term imo.
USDC and USDS, on the other hand, are doing a few hundred k in volume on significantly lower liquidity. I believe this is people swing trading interest rate changes on Omm, swing trading OMM/USDC, OMM/USDS, USDS/bnUSD and USDC/bnUSD, and taking advantage of low borrow rates to supply liquidity on Balanced (borrow USDS on Omm for 10% then LP on Balanced for 30%).
The existence of these assets on Omm creates reason to borrow and trade them as opposed to USDT. If USDT were added to Omm and/or paired to other assets on Balanced, I would think trading volume would be higher on it. Perhaps a way to increase volume on USDT/bnUSD would be to add an sICX/USDT pool, as an example.
Now, since people have reason to trade between USDC and USDS, having a deeper liquidity pool on Balanced for USDS and USDC will allow for more volume to occur before the aforementioned trades stop being profitable. Just as a quick example, deeper liquidity on USDS/bnUSD allows people to borrow more USDS from Omm, sell more USDS on Balanced, and LP more USDS/bnUSD before the trade becomes non-profitable. More volume leads to more fees and a better staking yield for BALN.
That’s my general understanding of the logic of BIP13, just my analysis of it, would certainly be open to other takes. And as I mentioned earlier, I expect to see plenty more BALN Allocation votes in the future.