Should the mutual withdraw our Nexus Treasury deposit of wNXM from Bancor v3?
The Nexus Treasury (formerly, the Community Fund) currently has 51,523 bwNXM (50k wNXM originally deposited) deposited in Bancor V3 (recently migrated from 2.1), which was originally approved by the community to provide greater liquidity and earn a return on idle governance tokens. In the past month, Bancor has turned off its Impermanent Loss (IL) protection and Liquidity Mining (LM) rewards, passing on significant losses to users. As a result, we anticipate that we’ll take a 40-50% haircut on the capital deposited.
This proposal, written by the investment team and community fund members, proposes to withdraw the funds from Bancor v3 immediately, and absorb the 40-50% predicted value loss. We don’t believe that any significant recovery will happen within the next few years, due to declining fees and the size of the (growing) deficit. Meanwhile, we’re still carrying the smart contract risk of having the funds deployed there, as well as the opportunity cost.
Given that our community fund is almost entirely in NXM and wNXM, the market decline has significantly reduced our runway. By our count, and depending on current market price, we have between $1.5-2m worth of capital in the community fund that is not already allocated for other activities. Based on the projected spend this gives us 24-36 months of runway, which is far less than we would like to see. Therefore, redeeming the capital in Bancor to add to these funds makes a material difference. Unless we anticipate that within the next 24-36 months Bancor will be able to significantly reduce the deficit, the prudent course of action is to cut our losses.
After discussion on the forum, the following options were proposed and will be subject to a Snapshot vote:
- Option A: Withdraw the 51,523 bwNXM deposited in Bancor V3
- Option B: Do not withdraw the 51,523 bwNXM deposited in Bancor V3
Members can read the full proposal on the forum: Withdraw the Community Fund capital from Bancor [https://forum.nexusmutual.io/t/withdraw-the-community-fund-capital-from-bancor/876]
| Voter | Cast Power | Vote & Rationale |
|---|---|---|
 0xdEB0...E2827D | 2,574 | Option A: Withdraw wNXM |
 0xe497...DcdD1a | 2,396 | Option A: Withdraw wNXM |
 0x0960...Bd9565 | 1,469 | Option A: Withdraw wNXM |
 0xB7c5...2D4e6A | 1,084 | Option A: Withdraw wNXM |
 0x10cC...4caB99 | 531 | Option A: Withdraw wNXM |
VOTE POWER
Proposal Status
- Thu July 21 2022, 05:00 pmVoting Period Starts
- Sun July 24 2022, 05:00 pmEnd Voting Period
Current Results
1-Option A: Withdraw wNXM
8,200.203