I´m creating this topic as it seems to be a general discontent across the forum with the latest implemented proposal of the original creators of Venus and how it deems to undermine the amazing work done so far if not corrected.
Here it is a summary of the events:
During XVS Daily Rewards Discussion Update topic in the forum, a suggestion was made to change the daily rewards. The main point was that XVS, as the governance token, had a very small reward. Therefore no community incentive in governance of the platform
Proposal suggested (between other small adjustments) to increase XVS Supply/Block from 0.138 to 3698.8 and XVS Borrow/block to 0. The reason being, current potential voting manipulation and also increase the demand for XVS by having higher APY % for supplying XVS.
Additionally a 275k XVS borrow cap would also be implemented with the possibility of being followed by removing XVS borrowing completely in future proposals. Again the reasoning here being the voting manipulation risk from borrowing XVS for voting purposes.
During the discussions in the forum, most people agreed with the suggestion and suggested small tuning (e.g. adjust APY according to Market cap of listed coins and BNB & SXP as valuable members of this community. IMPORTANT to notice that there was no fine tuning to the XVS - it was widely accepted by the community and developers team.
After such improvement suggestions, many were in favor of the changes but a few members already contested for e.g. increase of APY to BNB & SXP.
Even though some concerns with the improvement suggestions, developers announced the community was heard and proposal was going ahead.
Proposal VIP 5&6 were created. Upon some confusing moves, VIP 6 and subsequent VIP 7 were canceled and finally VIP8 was proposed. IMPORTANT to notice that the proposal briefly mentioned the changes and more importantly, referred to the post in the forum for details.
During proposal, one wallet of +600,000 XVS (might have delegated votes) accounted for +90% of votes. Proposal is passed and implemented
All points in discussion are implemented BUT the XVS Borrowing rewards to 0
APY of ~240% for borrow XVS is now being distributed to $20.74M/450,019 XVS. More importantly to only 94 borrowers. Ave. 220K$ per holder.
No Borrow cap was implemented to XVS BUT no additional borrowing is allowed - The ~240% APY is limited to the 94
As a community we must give the benefit of the doubt to the developers team (AKA Swipe) and give them an opportunity to help us understand what happened and rectify the current situation. That being said, we need to steer and prioritize our attention to this issue as the decentralization is being lost to the privileged 94 borrowers.
I highly recommend the community to express their discontent in this post so we attract attention and do not get forgotten. Furthermore, please contribute with suggestions on how to solve it. For instance, for the developers out there, we could create a community driven proposal in the platform.
P.s.: Sorry for the long post. Please let me know if there are any change suggestions to the post to make it crisp clear.
All of your points are really good.
Dev team should immediately remove the rewards for borrowing XVS.
You are referring to 94 people, my gut feeling is that one address has borrowed the bulk and that 93 people have limited xvs borrowed.
VIP5-6 were canceled by the borrowing whale because against it interests.
Let’s just remove reward for XVS borrow. (devs can do without a vote!)
And talk about what we do with these extra daily XVS available.
This was all already discussed. There’s no urgent fix.
* No Borrow cap was implemented to XVS **BUT** no additional borrowing is allowed - **The ~240% APY is limited to the 94**
The borrowing cap is 450k, and it’s there for the reasons you stated above. I think 94 is a pretty decent number, would be odd as you say if it was just a couple of them. Also, at the time the borrowing cap of 450k was set the borrowed amount was at 375k.
The 600k wallet you mention is from the swipe team, and it’s used to keep improving the protocol with the proposals. They were acquired by the same means all other users were able to acquire.
All points in the discussion are implemented BUT the XVS Borrowing rewards to 0
In the current version of the protocol, it’s impossible to set 0 for borrowing and > 0 for supply, because it’s a 50:50 ratio. This was discussed already too.
So I’m not sure what kind of fix you think we need.
I respect your thoughts but I do not agree on not being urgent - which also seems to be the overall opinion in the original post. my thoughts below.
If the reason for the 450K cap is the stated above, how come it´s not urgent when it´s turning 450K XVS into 1,53M XVS in a year time? how is the proposal to turn XVS borrow API to 0 approved when it goes against its holders interest?
Again with the point expressed above. The 450K XVS only needs less than two months to surpass the 600K XVS Swipe wallet (630K XVS by the end of 2nd month) - excluding other XVS they might already hold. How will we approve such proposal? Or I am missing something? Like something that could affect XVS price…
It was always clear to whom the 600K XVS wallet belonged to. The point is, why proposal did not follow community proposal?
I might have overlooked but I found no reference to this point. I don´t doubt you´re right but, then how come we implement a proposal with such risks at stake? Risking loosing control of the protocol.
The swipe team gifted themselves 300k tokens. Hardly saying they aquired them in an honest fashion. It’s called a premine. Decentralized protocols do not have premines. End of story. This Project is not decentralized.
Need authoritarian hand to stop this borrowed XVS to vote, and remove that 233% free money for borrowed XVS. No voting needed. It is seriously flawed system.
Imagine if you give prisoners the right to vote if they should be kept in jail or not
Obviously everyone is going to vote to release themselves. And you are giving them more free money, and more voting power. If goes by voting, the issue cannot be resolved and Venus will break down, since this is not sustainable!
I am a bit confused by some of your statements so I will try to ask to get clarification:
so 1% of the community gets 200%+ APY and the others can’t access it? Please explain to me how this is not a problem?
Could you please point me to the discussion or the code that conditions this?
I find it very hard that this condition does have an easy fix, but I would like to confim if you are right with code and understand the problem.
Probably like you said this has been discussed somewhere and we missed that discussion so either kindly explain to us why in a summary or point to the exact parts of the discussion that answers those questions.
On the day the change happened I was extremely vocal about this on Telegram, and remain vocal about it today.
I am a supporter of Venus and everything that the team has done to get this off the ground, but this whole situation is a very bad look for the protocol.
New users to Venus will rightly question why the APY is so high and why they cannot participate… and may come to the conclusion that it is essentially a way to siphon the supply of Venus from the many to the few.
This needs to be changed, and, imho - if the majority of the rewards were claimed by venus team then these tokens either need to be burned and added back to the supply, or if not possible then distributed back to the community another way (eg via increased interest charges on borrowing before borrowing is removed entirely).
My 2cs.
Edit: If such changes are not possible, then whilst a solution is found then the XVS distribution needs to be set to 0 and given to users in a different manner whilst alternative solution is found. The community voted on 0 distribution to borrowers and this didn’t happen, as such the distribution should be halted to Venus holders until this is fixed (incentive to fix this as it stands is low so it would be fixed very quickly if this change prompted it…)
The protocol is a lie if changes are not implemented. If this proves to be a centralized system, people will go elsewhere. Mission statement is everything in business. The ability for the protocol’s survival depends on a more strict adherence to their mission.
Thank you for summarizing this very well and holding off your emotions.
I honestly would not give a benefit of doubt.
There is a reason Swipe team is anonymous, and these shady manipulations are just a drop in their grand scheme.
I’ve been burned by an anonymous team with great promises in 2017, and thank you for giving me a chance to realize I was about to make the same mistake.
See you on other platforms either me proven wrong, or everyone losing their money when they make a Proposal that compromises security of the contracts and drain all the $2bn staked, or some other crap.
It’s insane to not see how unfair this topic is. It has been clearly manipulated. Why don’t we find a way to change it?? Can we all delegate votes to reach the minimum for creating a new proposal and remove it?? There must be a lot of people ready to vote against it.
You´re completely right. Unfortunately it doesn´t seem that we can fix issues by making a community discussion.
We have a community member that has mentioned being a developer and getting familiar with Venus code atm. But it will take some time.
Once that happens, that would be the intention. Delegating votes for creating a proposal and then incentivize community to vote - though it might still be hard to get the 600K votes to pass it.
The current implementation of the comptroller does not allow setting a different distribution rate for supply and borrow. You can verify that by looking at the setVenusSpeed() function in the comptroller contract, or in the documentation. Note that it is apparently the same with Compound protocol (documentation).
So at first sight it leaves two possible solutions. Set the XVS distribution for XVS supply AND borrow to 0 through a proposal, or change the comptroller implementation through a proposal to allow setting different rates. Changing the comptroller implementation is a risky business and personally I would not want to see that happen without an external audit of the new comptroller implementation.
While capping borrowing for XVS and raising the distribution speed was idiotic, it is probably just the result of very poor planing and not bad intentions. As Napoleon once said: “Don’t ascribe to malice what can be plainly explained by incompetence”.
XVS distribution for borrowing XVS need to set to 0 quick, this one thing has to be changed before we discuss anything else. I don’t understand why VIP-9 and VIP-10 are not being prioritized to this issue, but to issue ADA and changing borrow factor. Mainly because the whole system is controlled by those borrow XVS and enjoy free 233% XVS they got, they get more free XVS, and more voting power.
This is pure stupid and seriously flawed system to have that set to 233% APY and limited to small set of people.
