Use accumulated 0.5% nDefi minting fee to buy and burn POLLY

During the first few days of minting nDefi, the 0.5% Polly minting fee was kept in the treasury. Now the burn function has been enabled and the 0.5% fee is burned for each nDefi mint. Proposal is that the accumulated fee during the time period where the burn was disabled, is used to purchase and burn polly immediately.

Rationale: this is aligned with the current governance of Polly. The only reason the burn was not enabled at the beginning was to prevent liquidity or price issue. Now that sufficient liquidity exists, a retrospective burn should be completed.

NB: I wanted to submit this as a proposal, but seems like I do not have the permission to do so hence posting in Concepts.

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Concepts is the right place to post it, after some discussion the moderators will move it into proposals.

I think this is a good idea and a good exercise of user governance proposals. Do you think there is a right time to use the funds for the burn, or should it be undertaken asap?

Thanks, hopefully this gets enough interest to move into a proposal.

In my opinion, the buyback and burn should occur as soon as possible. My reasoning is that ultimately the tokenomics was designed in a way that this would be a persistent burn, but was disabled at launch to ensure it wouldn’t impact liquidity or price.

The other, more subjective reason, is that I believe the buyback and burn will be more effective at this current price than in a few weeks or months were the price of Polly is higher than we see today.

Obviously I could be wrong on that one, but I believe the first reason is compelling enough.

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The $9k in nDEFI fees that was accumulated pre-burn was planned as treasury assets. It won’t make a huge dent in the early circulation of Polly, but it does cover costs of hosting nodes, servers, domains, and other operational costs so that the launch of Polly is not a drain on the treasury.

Since these are treasury assets the community can vote to do anything with them, but many projects make the mistake of just deciding to burn all fees and leave themselves with little to cover costs and grow the protocol.

Polly already has some of the lowest fees in the Polygon ecosystem and the rest of all nDEFI token burns are direct for the lifetime of the platform.

I don’t feel strongly enough to vote against this idea personally, but I do think it is a bad idea and sets a bad short term precedent for our community.

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That is a pretty good point about operational expenses. Can you estimate about how long the $9k will last as far as hosting and ISP costs? I suppose it’s more convenient to liquidate those fees to pay for these costs, than to burn Polly and then have to cash out some other treasury assets in a month.

Mostly the issue is if this alligns with core values of BAO, and what benefits this can give us.

Yes liquidating POLLY to pay for fees would have a much larger negative impact to price compared to the potential upside the burning would do especially when more POLLY is farmed each day and we’re not even at the first halving yet.

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A $9k burn against just under $100k daily volume (as per CG) wont do anything.