Proposal to Increase fee on GNO pool to .5%

To be Posted to Snapshot on June 14th 2021

GNO (Gnosis) has already been whitelisted by the Bancor DAO.

However, the pool still has open space but simply is not attractive to LPs.

The .1% fee does not make a sufficient APR.

Current volume is below:

Vote FOR to increase the fee to .5%
Vote AGAINST to keep fee at .1%

2 Likes

There is a plan to drop a proposal to raise swap fees on smaller pools to minimum of 0.5% but at this stage the cutoff is intended to be below the top 50 pools. I plan to write the full proposal in the next day or so. I think generally this is a good idea, and you might want to consider including a few other mid-size pools in your proposal, and perhaps choose a swap fee that is a little smaller. Maybe 0.3%? Remember most swaps have two legs, into and out of BNT, and this is just one half of a swap.

2 Likes

Hi @SJWILL,

I actually wanted to target this specific pool. Big enough that people want to trade, small enough that there isn’t endless liquidity everywhere.

I also suspect this proposal and your proposal can work well separately. If this works, there is an additional data point before making a more radical change like what you are suggesting.

Thanks

2 Likes

The UniSwap ETH/GNO pool has a swap fee of 1%. 0.5% when combined with the BNT/ETH pool (0.15%) would mean 0.65% and that Bancor remains competitive.

I don’t think there is much trade interest in this token. The volumes are relatively on the low end of the spectrum for the largest pools (two on Balancer and one on Uniswap):


Balancer has the two largest pools (11.7M and 22.3M in liquidity respectively) for this token and the fee returns daily have been less than 2%. It’s the same for the Uniswap pool, volume/reserve ratios aren’t that great:

I don’t think raising the fee will get us much here since we aren’t the largest source of liquidity and there isn’t much action that happens with this token (we might not get a good amount of volume to generate good fees).

1 Like

interesting, so you suggest leaving as is?

In this case, yes. We are not the largest source of liquidity by a longshot so I am not sure raising fees here will have a positive impact on this pool either. This might end up having the effect of discouraging any small trades that already occur here. Note that our competitors are already at .2% and .3% on their fees respectively for their GNO-ETH pairs.

From what I have seen, we typically have good success with higher fees when we have a large source of liquidity concentrated for a specific pair. Essentially, when we have corner the market for a specific token pair.

FYI, here is the specific volume for this token the past few weeks:

symbol time Conversion Fees in USD Volume in USD
GNO 5/10/2021 0:00 $50.07 $50,015.61
GNO 5/17/2021 0:00 $15.70 $15,686.78
GNO 5/24/2021 0:00 $28.30 $28,274.86
GNO 5/31/2021 0:00 $9.92 $9,906.97
GNO 6/7/2021 0:00 $14.81 $14,791.28

I would recommend a more moderate fee increase to .15% as opposed to .5%.

1 Like

My hope is that a higher fee (and no IL) would attract the LPs.

I would not be surprised if GNO LPs see the .1% and simply leave without knowing that we offer IL protection.