Well each week about $3m worth of BAL at current prices are airdropped on people who are storing coins in pools. This is way higher than the cost of doing so, so people started putting assets in random pools.
So, earlier today about $100m of USDTHEDGE and USDTBEAR showed up:
So what does one do about this, and how did the Balancer community handle it?
a) get rid of the BAL distributions
b) restrict the set of coins that would be eligible
c) (b), and also retroactively apply it
d) do nothing
What's the right thing for the protocol?
Really, liquidity mining is stupid. It's similar to transmining, creating effectively negative fees to create the impression of activity. People should use a product if it's useful!
And in DeFi, you don't enact arbitrary retroactive rules. In fact in pure DeFi you _can't_ enact retroactive rules, and are really limited even in forward-looking ones.
That's part of what makes DeFi so hard to do well: if you decide you want to change something, often you can't, or are restricted in how. Permissionlessness is a double edged sword.
Well, over on the discord, people debated. discord.com/channels/63846…
It was messy.
A) Voting was done on discord, not by BAL tokens. So that undermines the governance of BAL and makes it seem more like a generic person-driven decision making system to modify the project.
B) There was significant momentum for retroactively eliminating the BAL distributions. It's hard to know how to define DeFi, but "a system where peple can't arbitrarily change rules to take stuff you already have" is a pretty good definition.
C) There was never any vote, nor was there discussion of who should have been informed or voting (if a vote even was the right way to do it!)
D) Discussion was really toxic for a while
A) The project leaders consistently advocated for reasonable paths (enable a whitelist, don't make it retrospective)
B) Leaders acted quickly and were responsive to the community
C) In the end, the conclusion was reasonable:
D) Whitelisting will be enacted, which I think is good for the project
E) Eventually discussion became productive, civil, and understanding
A) DeFi is hard!!! If you don't do things exactly right the first time it's really hard to enact changes without betraying the spirit of DeFi.
B) It's important to know what your plan will be when disputes arise