Here are my thoughts on the situation:
1.) The constant pressure on bnUSD is coming from an obvious source imo. bnUSD earns 0% yield, while all other stablecoins and even ICX are earning a yield on OMM. Getting bnUSD added to OMM is a top priority in fixing this problem, there needs to be a place to put bnUSD besides buying sICX
2.) The existing messaging around encouraging people to buyback the sICX is slightly miss-guided. They should instead be hedging themselves to some extent by participating in the sICX/bnUSD pool.
People can’t be repurchasing on the Balanced DEX, or it’s just going to reverse the rebalancing process and cause it to keep happening. Rebalancing sells sICX for bnUSD, then people mint more bnUSD and reverse the process.
People are willing to purchase the sICX at a premium on the DEX for convenience, but what needs to happen is people repurchasing from a place where ICX is properly valued, such as Binance or another centralized exchange.
3.) Despite the amount of revenue earned from origination fees, I strongly support the proposal to lower them, especially until bnUSD is added to OMM and the root economic issue is solved. If we want to increase revenue, focusing on the DEX rather than taxing borrowers that are providing an essential service is a better route. Synthetix actually charges 0% interest and 0% origination fee for sUSD because those that mint sUSD take on risk for the success of Synthetix.
We as a DAO need to understand that Balanced Borrowers provide an essential service to this platform, they are not just borrowers. I personally did not recognize this until more recently and will be encouraging people to think this way going forward. They are offering up collateral to be used to keep the peg of bnUSD stable in exchange for access to cheap leverage and BALN rewards. However, right now that leverage is not cheap, so let’s make it so.
And as a side note on increasing BALN rewards for borrowers, it’s actually more ideal to incentivize them to use the bnUSD to supply liquidity rather than rewarding simply for borrowing. Increasing borrower rewards creates too high an incentive to mint bnUSD and just hold it in your wallet, which is not ideal for Balanced.
This I can certainly agree with, tho I believe the answer is to get bnUSD added to OMM and get more clear arbitrage opportunities against bnUSD. USDT/bnUSD pair coming soon