It’s not a bad idea.
Analysis of fee changes the DAO has made up to the present suggest we are still in the noise - in general, fee changes make zero difference to trade volumes, and understandably so. To a wide variety of users, the difference between a 0.2% and a 0.5% swap fee is essentially zero. More importantly, lower fees to drive higher volume is not commensurate with increased returns; Uniswap v3 has attained some truly remarkable volumes, but is currently running at a $20M loss. This is of course an exceptional case - their concentrated liquidity model makes it much easier to lose money, but also attracts more volume, and therefore still serves the point of the discussion.
It is not the case that we ought to be pursuing volume for volume’s sake. More often than not, the fee wars that are driving the fight for increased trading volumes might be missing the point. The customer (trader) is only an asset if their activity benefits liquidity providers in the long run. Looking around the ecosystem and observing how much damage low fees are causing to liquidity providers in rival protocols, I am very interested in an investigation into higher fee models as a means to fortify APYs in the network. To some pool operators, the obviousness of this suggestion is comical.
Since its inception, the wNXM pool has maintained a relatively high swap fee, and as a result has consistently performed well - especially for its relative depth (which is considerable). The ARCONA pool has also performed exceptionally well - and I still consider it the gold standard in Bancor whitelisting practices - thanks largely to its sensible swap fees. It is easy to get distracted by the flashy KPIs and impressive volumes that are thrown around by commentators, but as a community we should be paying attention to our bottom line.
In addition to the analysis proposed by the author, I think we can afford a slightly more rigorous handling of the data to evaluate the financial consequences of the decision.
I am looking forward to supporting this.
As an aside - the Automaton will continue to observe its own policies, and will vote AGAINST this proposal. However, I think the results of this experiment (and the report being compiled from the DAO’s previous trials) will be sufficient to change the Automaton voting behavior with confidence. Anyone who has delegated to the Automaton, and is in favor of trailing these fee experiments, is reminded that they can simply vote manually to override the Automaton’s decision.