Yeah you’re right, changing the fee would impact ETH swaps whether it was the target token or not.
This discussion is driven by a debate with the Economics team and some analysis performed by them - I didn’t collect or analyse the data, just compiled the info for the proposal draft. Happy to discuss and understand if this is a change we want to explore.
Agree, changing the ETH pool fee has an indirect impact on all of the swaps that go through ETH. Furthermore, as @glenn mentioned, Bancor 3 swaps will have significantly lower gas costs, which means that volume from smaller swaps should route more through Bancor 3 than Bancor v2.1 as there will be a significantly lower relative fee on these (Ethereum + pool fees).
Couple comments:
- Changing the fee now before Bancor 3 might be a useless exercise - BIP17 sets the ETH pool fee on Bancor 3 to 0.20%.
- Bancor 3 swaps will have significantly lower gas costs than Bancor v2.1.
- Swaps with >=3 legs (or >=2 hops) brought only 1.3% of fees since 2021 on Bancor v2.1. However, these swaps tend to be smaller-sized and increasing the ETH pool fee might hurt the volume on these swaps on Bancor v2.1