USDN->SURF swap is too inflationary. It allows very cheap issuing of SURF, which generate several problems:
- The more SURF issued, the more time will take to liquidate all them, and the more collateral is needed to back all them.
- The USDN->SURF does not help for collateral increase. Instead it has totally discouraged WAVES->SURF swap.
- Vires USDN vesting program has generated lots of cheap SURF that contributed a lot in making SURF market price to sink with very small effect on real BR, and zero effect on effective BR (as those USDN are already out of the effective BR computation)
Overall, has resulted in important loss of SURF attractiveness. This is not the only source of SURF loss of attractiveness though. More changes are required. But any further change in improving SURF attractiveness will be quickly hindered while SURF issuing is so cheap via USDN.
The suggestion is to set USDN->SURF swap rate to 1:1. This will include also the partial USDN->SURF swap forced by USDN->WAVES swap when BR protection is active.
Notice that changing this rate will not affect capacity to burn USDN, as it can still be burned via USDN->WAVES swap. Evenmore, with the change not only WAVES->SURF will be more attractive, but also USDN->WAVES swap and buying of WAVES in market.
Some people argued that SURF is a temporal solution, that there will come another new treasury, or that SURF is already screwed up, etc. so saving SURF doesn’t worth.
Even if so, not only new treasury will take time to be implemented and we have a problem now with USDN. It is also about building certainty and credibility. Having created an instrument like SURF, noticed its failure to recapitalize neutrino, and not doing anything to fix it, implies that many early investors not only are trapped for long time in an asset that does not provide any running profit, but also, as more and more cheap SURF is issued, ROI on liquidation reduces more and more.
In addition, this is not only to improve how we treat early SURF investors. It is about not loosing credibility. It is about providing certainty that people that invest in future capitalization assets will not suffer the same destination and carelessly abandoned.
If we want to build a strong institutionality, certainty and credibility in a world where cryptos are not still massively well seen, we cannot just create instruments and abandon it when they can be significantly improved with no cost.