Okay I don’t think I thought about it from that angle but it makes sense.
The total bnUSD on the DEX does seem like a more accurate description of the issue. However I would add that minting with the purpose of leverage long also increase the bnUSD on the DEX. Regardless of the token they go long on. And I believe this group to be the largest group, larger than the portion supplied to LPs.
This only reinforces my thinking that it is not the borrower rewards that are the problem, the leverage is too cheap regardless. Minting to just buy assets is a far larger, I won’t call it a problem, a far larger driver behind ‘mint and dump bnUSD’ than LPs IMO.
Just to tie it back, I don’t think its the
I think it is the most prominent borrower reward, the price of leverage. Which we have a clear market evaluation for a minimum of 4200 basis points at this point in time. Just a direct comparison between the omm rates shows that the ‘savings’ in not paying the interest is more than double the positive gains of borrower rewards.
Additional thought: Just looking at ultilisation rates of existing stablecoins on OMM, most of the bnUSD that gets supplied to OMM will also be borrowed, and definitely used as leverage in that scenario, thereby increasing the bnUSD on the DEX. In fact, if all the stagnant bnUSD gets supplied and nothing else changes, that will most certainly make bnUSD fall more, as it turns a portion of those that value bnUSD == 1 USD, the holders, into other borrowers that will definitely dump it.