My pleasure, Spencer. Happy to answer your questions:
- Can the DAO vote to change swap fee on any existing pool?
Yes, almost 100%. The DAO has taken ownership of a lot of pools, but even the ones that are still under the ownership of other users, we can still vote to change the pool fee. If the pool fee isn’t changed at the DAO request, we can remake the pool and migrate the liquidity. Basically the DAO power is absolute.
- Is it feasible to ask Devs to manually change the swap fees of all small pools (say each <0.1% of total Bancor liquidity) to perhaps a minimum of 1%, and all others pools (except ETH/BNT) to a minimum of 0.2%?
Not unreasonable at all. We have had these kinds of proposals previously (see BIP3), and broad changes were implemented without too much hassle. The problem is more about finding the right fee to set. I think for a lot of pools, something like 0.5% might be a better start than 1% - but there is already a proposal to increase ICHI to 1%, so let’s see how that goes.
Any thoughts on an automated way to achieve these settings so that if pools grow or shrink they can be modified?
In all seriousness, a chainlink oracle might be the perfect solution. The overheads are high, but the value capture might be worth it. The trouble is still defining what the behavior should be, and I am watching Kyber closely to see what the impact actually is. I am convinced a dynamic fee structure is essential in the long-term, but it is also something of an optimization. I don’t think it’s not our biggest priority, but something we should all remain mindful of.
For now, frequent proposals suggesting fee changes are probably a good idea.
- Any critical risks that you can think of for having 1% and 0.2% (except ETH) as minimum swap fee settings for small and large pools?
Almost none. We need to be careful with the ETH pool, as it is the gateway token to the majority of trades. Keeping its fee low draws in more aggregator traffic, which is positive. A 1% fee is quite high, and might be bad for optics. However, for smaller pools with little or no other liquidity sources, probably not terrible.