For the points I made in RFC-000-003: Adjustment of mint/burn fee %s, I am in full support of this initiative. In addition…
I agree that this is what the market is showing; however, I believe we must not continue to stray further from the future steady-state equilibrium of TVB => TVL/3. We must:
- Reduce TVL (reduce mint or increase burn) and/or
- Increase TVB (increase price + bonding)
17 days have passed since that RFC, and I believe it is now even more important to begin this process of appropriate fee discovery. We should not only consider the thoughts/behaviors of minter and burners of RenVM but also the wider DeFi ecosystem’s views of RenVM. During the MakerDAO Collateral Onboarding discussion for renTokens, a key developer/community member Christopher Mooney raised a very valid point. His statement paraphrased:
“It would be nice to integrate renBTC to diversify BTC exposure, but will an integration with Maker increase renBTC volume and ultimately increase the total custody by the Ren team and subsequently slow down RenVM from being able to move forward to the next phase of decentralization?”
Although RenVM’s technical design and current phase is well architected to be secure and withstand attacks, we must consider the long-term economics. The further we stray from equilibrium, the more time/effort it will take to rebalance in the future.
To reiterate my points above, I hypothesize that increasing the mint fee will be beneficial for 2 potential reasons:
- Decrease mint velocity to slow down the accumulation of circulating renBTC
- Increase the value of TVB; as fee % goes up, we should hopefully see revenue increase assuming that mint volume is not cut by >= 50%. This increase in revenue should also see increased value in Ren tokens and should incentivize additional node registrations.
1000% agree, and we must collect data to properly design a robust dynamic fee algorithm (not sure if the team already has one built).
I believe one other takeaway to rebalance TVB/TVL is to spread wider understanding that RenVM Dark Node operators are paid in the underlying minted asset (BTC). The price movement of Ren tokens are not accurately correlated with BTC price movement. Perhaps Shilliam Shakespeare’s memes can help us perpetuate this message