This proposal is expected to appear on Snapshot for voting on 2022-02-06T00:00:00Z. Make sure to stake your vBNT for voting before this date and time to participate in the DAO decision.
For this proposal to pass, it requires a 20% quorum and 66.7% supermajority.
- This proposal seeks to increase the pool fees on the MTA pool from 0.3% to 1%.
- An increased pool fee will help siphon more profits from arbitrageurs to the protocol and most likely not affect volume therefore increasing APYs for the LPs in the pool.
- Increased APYs in the pool along with Impermanent Loss Protection will help gather interest from the mStable community to stake on Bancor and fill the remaining space in the pool.
Deepest MTA pools on Ethereum are:
The MTA/WETH 80%/20% 0.49% (dynamic fee) Balancer v2 pool with $2,373,024 liquidity and 24hr APR of 15.24% (2.37% from swap fees, 12.87% from Liquidity Mining Rewards) .
The FEI/MTA 0.3% Uniswap v2 pool with $1,306,152 liquidity and 24hr APR of 1.60% .
The MTA/ETH 0.3% Uniswap v2 pool with $919,915 liquidity and 24hr APR of 14.72 .
The USDC/MTA 1% Uniswap v3 pool with $539.26k liquidity and 24hr APR of 115.74% .
The MTA 0.3% Bancor pool with $380,711 liquidity and 24hr APR of 0.48% .
The MTA/WETH 0.3% Sushiswap pool with $261,214.50 liquidity and 24hr APR of 2.77% .
The MTA/ETH 0.3% Uniswap v3 pool with $181.84k liquidity and 24hr APR of 7.19% .
An analysis on the effect of the pool fees on pool volume conducted on the USDT/BNT pool showed that there is not enough evidence to support a linear relationship between them (Figure 1).
Figure 1 - USDT pool fee changes with market share before and after the Fee change. The 1000 and 2000 x axis values represent a 0.1% and 0.2% fee, respectively.
Mark’s comment on the TRAC pool fee experiment sheds some light into the topic.
The TRAC experiment finished and resulting data can be found in the data analysis governance post , and showed that a 1-4% fee resulted in more fees accrued compared to 0.2% and 0.5%.
The MTA pool’s weekly volume and fees since the end of August (Figure 2 and Figure 3) show an abrupt decrease from the beginning of December 2021.
Figure 2 - Weekly MTA pool volume since the end of August 2021.
Figure 3 - Weekly MTA pool fees since the end of August 2021.
Figure 4 - MTA daily pool balance since the beginning of May 2021.
Figure 2/3 show a decrease in overall pool volume and fees since the end of November. The pool liquidity (Figure 4) has also been steadily falling since the end of the end of November 2021. A proposal to deploy MTA funds in Fei Protocol & Ondo Finance  meant 418,797.01 MTA was removed on the 10th of January 2022 .
The pool currently has space for 2,918,641 MTA to be staked single-sided.
Increasing the pool fee will help siphon more profits from arbitrageurs to the protocol, most likely not affect volume and therefore increase APYs for the LPs in the pool and protocol-earned fees. The Bancor TRAC pool is a perfect example of such a situation (Figure 5 to 7). Increasing the pool fee significantly increased APY for all LPs in the pool, and attracted more liquidity making the TRAC pool the dominant source of liquidity for TRAC on Ethereum (89.1%).
Figure 5 - Weekly TRAC pool fees since the end of August 2021
Figure 6 - TRAC pool Trade Volume Share over time since the beginning of Jan 2021.
Figure 7 - TRAC pool Liquidity Share over time since the beginning of Jan 2021.
Therefore, an increase in the MTA pool APY might attract more liquidity to the pool. If the pool space is occupied, the MTA pool on Bancor would have the deepest liquidity in any Ethereum DEX. A trading liquidity limit increase can then be considered.
These reasons justify an increase of the pool fee, and the pool performance will be closely observed if the proposal passes to understand if a consequent decrease in the pool fee is justified.
- Increase the pool fee in the MTA pool from 0.3% to 1%.
- Keep the pool fee in the MTA pool at 0.3%.
 Uniswap Info
 Uniswap Info
 Uniswap Info
 Bancor: Converter 566 | 0xb2f71da1b104EFae99A4BD824B27B2B102Fe3ECB
 MTA-WETH | SushiSwap Analytics
 Uniswap Info
 TRAC Pool - Fee Changes
 ✔️ TDP 28 - Fei Protocol & Ondo Finance LaaS Opportunity - Proposals - mStable | Governance
 Ethereum Transaction Hash (Txhash) Details | Etherscan