Hi Michael,
Do you know how long the incentives for UNI LPs will last?
Also, would the team support incentivizing the Bancor pool in the future once V3 is out and we can support LM rewards on the TKN side?
Regarding the fees, I don’t think it’s wise for us to increment them to 1% as we won’t be competitive with Uniswap unless all those LPs move over to our DEX instead. That will be very difficult to accomplish given the current incentives for UNI LPs from the BMI side. We should learn from the recent ICHI experiment that high fees will price us out:
Fee Decrease Justification
The ICHI fee was increased from 0.2% to 1% in the June 10th proposal as an experiment. This resulted in a 80-90% decrease in Bancor trading volume and a lower APR for the pool. In short, the experiment failed to increase total trading fees. As a next step, we should lower the fee to be more competitive with Sushiswap, 1INCH, and Uniswap by lowering the fee to 0.3%. This is still 50% higher than the original 0.2% fee.
Note that we are already at a disadvantage in terms of gas cost due to a dual hop when coming in from ETH (makes our TX expensive). The dual hop from ETH also adds an additional .1% fee so in total we are at looking at 1.1%.