Altruist vs Rational self interest reflection & LB variant with trading fee reimbursed to bakers. Salty thread be warned

[tezoswakenbake]

I’m willing to hear out the possible downsides of the trading fee going to bakers instead of burned. I hear ya all.

@murbard

@lyoungblood

No, the baker rate of return, which is higher than delegators, doesn’t need to be higher than LB for this to occur. Delegators will see higher yields than 5.5% and move their Tez to liquidity pools. This will starve bakers of income and reduce their yields, creating a downward spiral where everyone is chasing higher yields.

Sorry but that’s bullshit again. The yield from LB reduces as more people go into it. Assuming no impermanent loss, you get something like 6% of all stake going to LB instead of baking.

Happy to keep engaging on the financial engineering angle, but it’s clear you have absolutely no clue what you’re talking about.

@murbard @lyoungblood if the trading fee was reimbursed to bakers instead of burned, so bakers could apply a baking fee to that 6% of extra generated supply, this risk of bakers quitting their baking operation by chasing higher profits, would be mitigated. You can’t argue with this logic, because of that 2.5 TEZ minted tez, bakers could at least subtract from 1-15% with the baker fee. That would be at least 0.25 TEZ that bakers will keep while the rest will be distributed to delegators.