Proposal: Lower MKR-BNT Fees to 0.1%

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.

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

Compare to us at ~23M:

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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).

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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.

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