I feel my understanding of bnUSD & rebalancing has deepened not only by reading the official documentation, but by trying to help improve the reasoning about it, and suggesting improvements. Thereby giving an “unfair” advantage over the more “passive” investor.
The more i think about it… The more amazing this “magic” internet money becomes. The main reason i see for it behaving in unexpected ways, is the fact that alot of users behave against their own best interest, and against the platform. Not because they are actively trying to sabotage it, but because they lack the understanding to make it work for them.
So my thesis is this… The better we together understand bnUSD. The better it will function. I want to kick of with some examples:
- People who try to “Undo” rebalancing of their positions, are in fact causing more rebalancing (and incurring fees while doing it).
- To entice people to “mint” bnUSD, all we need is the faith that it will be worth at least $1 at some point in the future.
- People should account for fluctuations in their loan when they allocate it. Preferably so that they aren’t forced to move against the market.
Ideally all investors take out loan’s when bnUSD is expensive, and payback when bnUSD is cheap. For those able to do that. There are far greater profits to be made than the BALN incentive given on loan positions.