oh okey, deleted my post.
Still, is just 100% increase of tax is too much. A yearly tax of 0.6% is 1 third of the property yearly tax of Texas, which is 1.8%.
What is wrong with reaching the escape hatch? We don’t know if your proposal will be allowed by the majority to pass, it could be approved later with a new LB proposal. Escape hatch is just to stop losing money with tzBTC right now. Reaching the escape hatch won’t make impossible another person proposing a new LB proposal later.
Why your math theory, it couldn’t be proved with the same 0.3% tax? Why increase is 100% to 0.6%? And If is a guarantee, why not take @coredump idea to add a burn fee check logic, to completely stop the subsidy if certain burn is not reached after 6 months? This is a must. If you are so confident of your math.
It just feels like a half measure. It didn’t drive demand with a bitcoin wrapped product, why would USDtz, be better? Maybe more people would be interested in a lower risk asset, but at the same time the problem we’re seeing in tezos is not enough participants. If only existing tezos users participate in USDtz liquidity baking, that’s not better or worse than BTC LB. It still doesn’t drive new users
Please read the full thread. There have been extensive explanations, questions, and replies that answers that very question specifically and comprehensively.
The issue is, what if there’s enough volume to mitigate 70% of the subsidy and by the next month it would shoot up to over 100% mitigation of the subsidy as more participants come in and more integrations are completed that would expand the volume-utilization of LB. Though if the subsidy is reduced before that time, then that would dis-incentivize Liquidity Providing, which would reduce liquidity (as we’ve seen on Tezos AMM pools what tends to happen when LP token farming rewards end).
However, the counterargument to that would be if we just give a coin ‘a chance’ to expand to a satisfying volume, every time, we’d never get rid of anything. For a few bakers who voted against PsCUK, they wanted to give tzBTC a chance to build up more liquidity and volume, because they thought 2 months wasn’t enough.
My augment against that was that there was no indication of even a mild incline in liquidity and volume to suggest that the pair had any meaningful growth potential. Now we are 3 months into it and as you can see by the data, not only is the XTZ-tzBTC pair not doing any better, but its stats are showing liquidity and volume down since the vote ended.
The point is, bakers should have the right to judge and vote on continuation or change or removal on a case by case basis. That’s how the ecosystem can prune what works and what doesn’t for optimal ROI.
The problem is that the majority can decide to continue funding a failed experiment indefinitely. It has to have some mechanism that shutdown automatically if there are no results in a given time. You should make some math of how much time it took USDtz and BTCtz pools to reach the peak volume in your past math examples and calculate a considerable time and give us the project.
