Reduce Ballast mint limit to 500k baoUSD

Concepts
1

Summary

baoUSD can be minted from the ballast as well as by borrowing it on Bao Markets. baoUSD minted form the ballast doesn’t provide revenue for veBAO holders and aren’t easily changed, so this proposal aims to reduce the mint limit to 500k to encourage minting on Bao Markets. This will allow users who follow the protocol to mint via the ballast if they are unable to borrow the minimum of $5k on Bao Markets. Once $500k has been minted liquidity should be deep enough for those users to buy baoUSD on the market instead.

Proposed Solution

Risks

  • Reducing the mint cap could increase baoUSD price volatility however this risk can be mitigated by increasing the mint limit again at a later date if significant amounts of baoUSD are borrowed from Bao Markets.
2

Lets do this, reduce mint limit to 500k to create more activity in bao marketes

3

Where specifically does the number of 500k come from? Is this about the amount it will be required to keep liquidity for baoUSD?

4

There is no concrete reason for $500k other than it will give those a chance to mint baoUSD that cant borrow the minimum 5000 baoUSD on Bao Markets. If it runs out, there should be plenty of liquidity for those users to buy baoUSD to farm with instead. It will also mean that we dont end up with millions of baoUSD minted from the ballast and little on Bao Markets providing ongoing value to veBAO holders

We can monitor how things go then change the limit if we need to, its not set in stone.

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5