Currently, the rebalancing threshold is set to 3%, which means the price of bnUSD can be rebalanced to $0.97 and $1.03. BIP8 proposes to lower the threshold to 2.5%, which will result in tighter peg – $0.975 to $1.025.
After monitoring the bnUSD/USD price since the move to 3%, we’ve observed that price consistently hovers between $0.98 and $1.02, and rebalancing has reduced drastically compared to when the the threshold was 5%. Thus, we believe moving to 2.5% will improve the stablecoin utility of bnUSD with minimal impact on rebalancing frequency.