I want to weigh in on the amount of rebalancing going on currently. I know a lot of us see it as a negative, others don’t. What we can all agree on, if the peg breaks to the downside, there’s too much bnUSD and not enough demand. Vice versa if the peg breaks to the upside. At the moment rebalancing is the only mechanism to bring bnUSD back to peg.
While I don’t think rebalancing is a negative (or a positive) per se. I believe the main problem with it is that it takes away people’s control of their money.
I want to propose less than ideal fixes.
- Flexible origination fees (where the minting of bnUSD becomes more expensive when the peg is low, and cheaper when the peg is high). Therefore better reflecting market conditions.
- Incentivise people to pay back their loan when the peg is low (maybe funded by the extra fees from 1.)
- Utisilise part of the DAO fund to cushion rebalancing.
I believe these could reduce the amount of involuntary rebalancing until bnUSD gains more utility.