Proposal: Lower MKR-BNT Fees to 0.1%

[glenn]

This proposal is expected to appear on Snapshot for voting on 2021-06-21T12:00:00Z

Coming from this thread.

Making the fees competitive is a good idea as we are essentially pricing our selves out at the moment. We are not the pool with the highest liquidity and hence don’t have much market power.

The above doesn’t count Uniswap V3 which has 15M in liquidity on the MKR-ETH pair:

Compare to us at ~23M:

The fees for these pools are set between .16%-.3% at the moment. I think that even at .2% that we will be pricing ourselves out as the hop from ETH-BNT trading pair would put us at .35%. If the ETH-BNT pool fees go down to their original value (.10%) then we would be at Uni/Sushi levels (Balancer v1/v2 are at .2% and .16% respectively) if we set the fees to .2% on this pool.

I think that going down to .1% is better for this pair as right now anything that’s above ~$800 doesn’t go to us even if you are swapping BNT-MKR through 1inch:

that’s wild. It would much rather swap the BNT to ETH and go somewhere else. We don’t come into the picture again until the swap is ~550K:

and even then we are only getting 10% of the trade. I will emphasize again that this is BNT → MKR swap and intuitively one would expect trades between $800-$500K to come in our direction when swapping directly (that’s not happening).

[Sjwill]

I strongly agree we need some major change to this pool, which is dysfunctional, and is not competitive even for a primary swap using the pool. A large change like that suggested will give a clear answer to whether a big drop in swap fees can drive volume, and will support competitive two leg swaps like ETH - BNT - MKR. It may help increase volume through other pools too. With increasing volume occurring on L2, in particular polygon, we have low gas competition making DEXing much more competitive.