Next round of POL

Where should we focus the next round of POL?

Some options:

  • sICX/bnUSD
  • BTC/bnUSD
  • ETH/bnUSD
  • 2 pools: BTC&ETH/bnUSD
  • 3 pools: sICX&BTC&ETH/bnUSD

I propose we use $100,000 bnUSD from the DAO to buy BTC and pair it with bnUSD from the DAO to supply POL to the BTC/bnUSD pool.

Reasoning:

  • Perceived as a slightly more active (volume) pool (from day to day observations)
  • by focusing on 1 pool, we hopefully make purchasing BTC quicker/easier
  • Easy comparable to ETH/bnUSD pool in volume/fee difference (what $80k liquidity vs $280k liquidity looks like)
3 Likes

I think the DAO should continue to support both the BTC and ETH pools without picking favorites, so I would suggest 50k into BTC and ETH (or whatever numbers, split equally).

Also, I would prefer to use the remaining BALN from the DAO for BTC/ETH before using bnUSD. Not sure how people felt about the Karma bonding, but it seems like it went fairly well in the end? Perhaps another round with some tweaks could be considered.

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We can’t continuously dilute BALN stakers. No reason to hold BALN or stake BALN if we head down that road of turning BALN into different digital assets through POL. We need to stick with POL with our available BNUSD.

I know POL is very very very valuable in SICX/BNUSD pair.

I can go ahead and tell you people don’t use Balanced for BTC and ETH. We can continuously devalue BALN and buy POL in BTC and ETH for minuscule trading volume.

News flash…. We have 22 times the trading volume on the SICX/BNUSD pair. That’s where we need to focus POL. Then focus POL for Craft, then Framd, then future ICX tokens.

We need to continue to show goodwill towards ICON tokens. I have no problem using POL to buy BTC and ETH in small amounts two or three times a year but it should be far, far, far down the lists of priorities.

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I think it’s important to keep in mind that we aren’t just airdropping those BALN out for free, they are being exchanged for assets of roughly equal value that can actually generate revenue for the platform instead of sitting in the DAO fund doing nothing. Maybe the token price will drop in the short term, but intrinsic value goes up.

Personally, I am not concerned about a short term drop in BALN token price. My BALN is locked for 4 years so I am more interested in bringing long term value to the platform. I see it as a great buying opportunity as well.

Also, when it comes to BTC/ETH, they are about the safest bets we can make in the crypto space, and there will always be arbitrage volume from them. Plus, even if no one uses the pools, we still own the assets.

However, I think as the liquidity gets deeper on chain, more people will make use of it. It makes sense that no one is using it now when there is only ~70k liquidity in each pool.

I think sICX/bnUSD is a solid choice as well, but I really want to see how well BTC and ETH can do with deeper pools. Worse case is we are stuck with two of the most valuable assets in the crypto space.

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I wouldn’t say BALN in the DAO Fund is “doing nothing”, it doesn’t even really exist tbh. It’s just the same as unminted BALN, so maybe that way of thinking about it will ease this concern. In theory we could mint 1 trillion BALN to the DAO Fund and have it “sit there doing nothing”, it’s no difference economically.

I recognize this is a divisive issue so we don’t need to go down that path I’d say @CryptoKnight. This way we can move forward more quickly with general POL votes.

Arbitrage volume is an important component of trading volume on Balanced. We need to focus on making larger pools for BTC, ETH, sICX, etc. as a priority to generate more revenue, then we can use our greater revenue to support investing in ICON Ecosystem assets. It’s also a much harder process considering how volatile they are without a clear market price.

I think I’m with @AwaxJago in the idea of getting more liquidity in just one of the pairs first to grow it more aggressively, then at least be able to compare the two. However, we should go with the asset with more volatility, which is Ethereum. Higher volatility leads to more trading volume.

BTC vol
ETH vol

I’d support a proposal of 75k bnUSD used to purchase 75k ETH, then pair with another 75k bnUSD (150k total POL).

Having said all that about volatility, I do wonder if ETH from ICON Bridge through BSC is the best form of ETH we will have over the next 6 months. Bitcoin is pretty hard to bridge, so definitely open to committing hard to BTC from BSC rather than the ETH pool and sacrificing the extra volatility. Curious what others think.

3 Likes

This is a good point to consider, so maybe BTC/bnUSD should be the choice if we are going heavy into a single pool.

What is the plan for actually purchasing the BTC (or ETH) this time around?

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I think either pool sound reasonable, but do want to say that I think ICX/bnUSD volume is so high precisely because its larger and worth arbing against.

Getting a second pool to that level should be pretty good. The thing with ICX is I think at the moment we are actually not that far behind some of the CEXs in terms of near range order book depth. So more ICX liquidity ‘may’ not return as much. But of course the shown order book depth is not all there is to it, so I don’t think its a significant indicator. If our pool in the future starts impacting CEX prices in some way, thats where it starts to slow down in optimal liquidity size I think.

That said maybe ICX is just way more volatile than ETH or BTC.

But I think going for BTC because we are unlikely to pick another chain BTC makes sense.
But going for the more volatile ETH also makes sense.

I think I’m favouring ETH for more fees now, lets worry about another chain ETH later.

I am still expecting BTC/sICX and ETH/sICX will generate significant fees via paring with sICX/bnUSD, so in my opinion those are also a legit pathway.

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I think a proposal to add BTC/sICX (assuming we buy BTC, otherwise ETH/sICX) to the bBALN voting lists would be good following this one. We would have a deeper BTC (or ETH) pool which will make it easier for users to take part in that pool without having to rely on the bridge.

This way we focus on POL for the less desirable pools, and take advantage of rented liquidity for a pool that I think would be popular for LPers.

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I think this is another reason to focus on BTC over ETH. BTC/sICX is directly arbable vs ICX/BTC on centralized exchanges with decent liquidity compared to any ICX/ETH pairs on CEX. So I’m leaning toward:

  • Buy 75k BTC to pair against 75k bnUSD in this proposal
  • Add BTC/sICX as a votable pool in another proposal
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This looks good to me.

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FYI to all on this thread - this is in the works as the best way for the DAO to acquire POL when dealing with assets like BTC and bnUSD. Karma may still make sense if we use BALN again, but this makes the most sense for swapping bnUSD to BTCB.

It’s a very basic smart contract. It receives bnUSD from the DAO Fund, then accepts the paymentToken (in this case, BTC) in exchange for it based on a fixed discount (i.e. 1%) from an oracle price.

1 Like