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SBF
@SBF_FTX
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@SBF_FTX
4) This was a clear indication of what had been going on for the past few weeks: most of the usage was to mine BAL. So what does one do about this, and how did the Balancer community handle it?
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SBF
@SBF_FTX
5) Well, the options were: 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?
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SBF
@SBF_FTX
6) Well, from a usability standpoint, I think that the best answer is A > B > D > C. Why? 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!
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SBF
@SBF_FTX
7) If you want to keep it, though, whitelisting is reasonable: it cuts off the stupidest cases while keeping a lot of the value.
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SBF
@SBF_FTX
8) But a key thing here to remember: _this is supposed to be DeFi_!!! 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.
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SBF
@SBF_FTX
9) DeFi is all about creating permissionless systems that aren't at the mercy of people's whims. 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.
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SBF
@SBF_FTX
10) So I think that, really, making any on the fly modifications here is dangerous for a DeFi project, but especially retroactive ones. And if you do, it's important to follow the governance you set out--or else that loses its importance.
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SBF
@SBF_FTX
12) There were a number of really bad things about the process: 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.
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