NSBT rewards incentives reformulation

I am thinking in this kind of reformulation of NSBT for a healthier neutrino contract. I need more minds to detect possible flaws and improvements.

  1. NSBT must conserve governance and swap power, but loose fees reward
  2. no more swap fees (the loosing of feed rewards is compensated with more arb margin, even allowing USDN to be much closer to 1)

Notice this reformulation doesn’t cut NSBT holder rewards. After all, fees rewards come from part of the arb marging. It just changes how the rewards are obtained. Idea here is to obtain same rewards while allowing to reduce depeg to zero. The passive income is replaced by total active arbing income. An alternative is to progressively reduce swap fees and see how this works. But current mechanism that requires NSBT to do swaps seems to makes fees pointless, as paid fees return to the same users that perform the swaps.

  1. NSBT also represent a share on waves collateral. You can swap back NSBT by waves from contract at any time

So, when depeg is big, NSBT is more valuable as allows more arbing, thus encourages waves->NSBT swap and increasing BR (compensating the syphoning of increased arbing volume). When depeg is small or zero, NSBT will have small return or zero, and can be swapped back by waves according to its NSBT share in total.

At same time, when waves locked in contract are low, the amount of waves returned per swapped NSBT are less, so there is less incentive to swap NSBT->Waves, and when the contract has more waves, the incentive is bigger.

  1. in order to avoid massive withdraw of waves when depeg is very close to zero and destabilize back the peg, the NSBT current locking/unlocking mechanism must be conserved (included unlocking fees). Also, only locked NSBT can be swapped by waves, as part of unlocking process, as only them has a share in the SC collateral.

The idea of this reformulation is to:

  • make more frequent the restablishment of NSBT reserves
  • encourages further the waves->NSBT swap when needed, as now your NSBT also represent a share in the neutrino collateral
  • Allows depeg to be much closer to 0.
  • Avoid to remove moon factor, which I think it is essential not only to conserve NSBT value, but also to ensure scarcity for governance. If NSBT is too cheap, the cost of manipulating rules will be small and the long term commitment of NSBT holders is compromised.
  • As waves->NSBT swaps are encouraged when BR is low (waves price is low) and NSBT->waves swaps when arbing is low and waves price is bigger, this tends in the long term to accumulate waves and compensates syphoning effect of swaps waves<->usdn.