After further talks with community members, it seems xBond, while initially serving an interesting purpose, ultimately is just delaying rewards for most users while not providing tangible stability to the ecosystem.
This is because it receives a lion’s share of reards (50% currently) while LPs, who put real capital on the line in the form of USDC, receive only 35%. Obviously when enough rewards are minted and sold, there is far more rewards being generated than demand.
Here is a snapshot vote to pass a proposal that:
1: deprecates xBond and allows xBond users to do a withdrawal of USDx at a pro-rata ratio of the xBond pool
2: gives 85% of rewards to LPs and 15% to staked SHARE holders
3: re-enables LPs to get debased
This system is simpler than the old and will be basically a more fair and just AMPL rebase system with again YFI cash flow for share holders.
The reason it is more fair is that in AMPL, every token holder gets positive rebases but in this new system, only value stakeholders like LPs and Staked Share gets rewards.