I agree with lowering the collateral requirements to 35% LTV and removing the rewards threshold. It’s the users own responsibility to understand and manage risk.
One thing you could consider is to show a message to the user when taking out their first loan, giving a short overview of the risks involved and link to the docs for more detailed information.
Agreed to lowering the collateral requirements to 35% LTV and removing the rewards threshold.
I don’t agree removing all rewards for borrowers under the current conditions. The loan might be 0%, but adjusting positions by increasing the loan takes 1% origination fee. The people who are currently taking out loans without using the BnUSD are probably too risk averse to LP in it’s current state.
Reducing the rewards for borrowers is fine if it compensates more or less with new rewards for stakers (if they have continiously moved their earned BALN into staking).
To completely remove the BALN rewards for borrowers I feel we first need more utility for BnUSD within our own ecosystem. Let’s be honest, we don’t need them moving into ICX to go sell ICX on a CEX for something else. BTP is also not in place yet to easily use in other ecosystems. Using BnUSD to take leverage on ICX has recently not been a good strategy, many might have been burned doing this. You might scare them away by taking away BALN rewards for borrowers without new ways to earn BALN or other opportunities.
BnUSD utility within our own ecosystem examples:
I like the idea of lowering to 35%.
Not sure if it’s the right place to suggest this, but in the Activity History window, could you make the kinds of activities sortable? E.g. “Borrowed”, “Repaid”, “Adjusted” etc. This would give more clarity when looking at your own activity history.
Also, the network fees for staking, is there a way to show what the APY are for those?
Finally, could you speak to your policy on the ICE airdrop? Will Balanced be able to process this for ICX staked on Balanced?
Thank you
First of all, loving the forum and the great discussion on the first proposal, good work guys!
I want to say that I am all for lowering the capital requirements and removing the rewards threshold, maybe leave the visual representation of the line for the rewards threshold there and change it to extreme risk to help people monitor their positions better. I am also in agreement with lowering the borrowing rewards as well but will wait for the future proposal to discuss.
I agree with the proposal to lower LTV, but second keeping the visual representation to at least still show the liquidation level. In my opinion having the app show this information is pertinent to keeping new defi users onboard. I don’t think many new users are calculating things themselves.
I’m all for lowering LTV. It makes sense.
Removing the reward threshold I’m unsure about.
I like it since it’s a great way to keep track of your loan and your debt. Also it’s great that those who have a responsible loan and keep themself below the threshold, are insentivized with the increased baln rewards from people above it.
Agree with the proposal on lowering LTV - Let’s hope community is informed enough about Defi but i feel like Balanced users are.
I also agree with removing the rewards thresholds defenitlty in function of the block-by-block rewards. Only thing is that users will be less incentivesed to rebalance/check their loan.
@bwhli 's proposal i’m feeling resistance. I think the rewards for loans are incentives for smaller holders to take out a loan. I’m oke with any hodlers farming some BALN. I would like BALN more distributed between ICX users
Agree on lowering LTV to 35%, but don’t think the BALN loan rewards should go to 0. Slightly lower sure. With bnUSD being very new having that incentive to mint is important.
In my opinion
It is necessary to reduce the balanced compensation for the borrower. The compensation for the borrower can be seen as a kind of early user benefit. Basically, when we get a loan, we pay interest.
Therefore, from one year after the launch of Balanced, we have to pay an annual interest rate of 1% as interest on the loan. Or, if you want to keep the loan without interest, you must burn your Balanced every 3 months (1 Balanced every 3 months)
I agree ltv 35%
It is still very volatile due to its small market cap, so it is necessary to limit it for users.
Thanks everybody for the excellent feedback!
@bwhli look what you’ve done lol nobody can hold back from talking about borrower allocations. Don’t worry folks we’ll have another thread on this. It’s taking me a bit of time because I need to iron out the BALN token econ, which effects whether or not it needs a specific allocation from rewards. The two proposals are coupled, and I need to finish the token econ first in order for it all to make sense.
Having said that, I do appreciate the feedback and we’ll probably land somewhere in the middle. I may trim some comments on this thread that are specifically about reward allocation just to keep everybody focused, but rest assured, feedback is noted and please come back to comment on the new thread when I post it
1.) The rewards threshold is the 20% LTV. Going forward, there would be no specific threshold to be eligible for rewards. We may even need to remove the 50 bnUSD minimum. This is because of smart contract architecture and being able to offer block-by-block rewards. Additional logic can make this impossible, so less logic the better
2.) See above, there would be no more rewards LTV. It would be the maximum LTV, then same liquidation rules (~67% LTV is liquidation).
And yes, block-by-block rewards would stop people from needing to be locked in LP for 24 hours.
Also think that removing the reward threshold does simplify things which it’s always welcomed in a complicated industry like defi.
Well done on all the updates to date. Balanced is really coming together and looking forward to the addition of new assets and increased adoption.
I do think it’s a good idea to do away with the loan rewards as it would disincentivize people from doing this.
Instead I think that we need to rather look for ways to make bnUSD more usable.
I assume that when OMM launches, we’ll be able to transfer/convert bnUSD and earn interest on OMM.
If there is any consideration for moving the maximum LTV even higher, I would be all for that too. I"m not sure what the implications would be, but having more flexibility to use balanced how we want I think is better.
I’m still all for removing the reward threshold since the benefits of block-by-block rewards are clear in terms of how they impact liquidity pools.
Definitely agree on this one!
I agree with both points. The excellent risk ratio info available should be plenty enough for anyone to grasp the risk they are undertKing
I do like this suggestion, I was going to suggest a potential membership level for the user but something like this would be great.
As I understand it, the likely reason the liquidation ratio is comparatively higher is that on liquidation it doesn’t ‘sell’ the collateral to get back the bnUSD, its held in a bad debt pool that erases the actual debt when the next time the peg falls out of sync and people retire bnUSD for ICX , thats when it ‘sells’ the collateral from liquidations. In this way its possible if the price moves before that happens that even with that safe ratio the debt is not recovered/recoverable.
If it would directly sell (if the DEX terms are favourable) it could go lower? Maybe with altruistic rebalancing lossely pegging the DEX to the oracle, and the oracle price itself being the one that determines the liquidation threshold it would be safe to lower the liquidation threshold.
At least thats my take on it.
Agree with this point. 
Back this proposal fully. I think 35 percent is still conservative, so it’s an easy " yes" from me …