This RFC proposes to consolidate all fees (swap and redeem) for all products: mUSD, mBTC and Feeder Pools. Currently, the fees of different products vary by quite a bit. By consolidating the fees, mStable products become easier to understand and communicate. This RFC does not propose changing the governance fees (from lending platforms and rewards).
The current fee structure is very fragmented, a few examples:
- mUSD bAsset
redemptionFeeis 6 bsp.
- mBTC bAsset
redemptionFeeis 6 bsp.
- Feeder Pools varies by Pool
This structure is not very transparent, not easy to remember nor to document. Therefore I propose we consolidate all the swap and redemption fees into one simple to remember the number.
The questions therefore I want to open for discussion is: What should be the fee for swaps and redemptions? (Open to discuss here first the options and then vote?)
- Free (We want to max deposits and double down on earning revenue from lending markets. This makes depositing into mUSD and mBTC only a consideration of the incurred slippage)
- 1 bsp (Super cheap, but still something for the Protocol)
- 2 bsp (Rather low, we want to focus mostly on revenue from lending markets with some smaller supplementation from swap and redemptions)
- 4 bsp (Average, kinda around the area we are right now)
- 6 bsp (More fees from swaps, probably fewer deposits)
This would make the products easier to understand. One Fee to rule them all!
Additionally, we should really reconsider the primal use case of mStable, Save and accompanying products. Do we consider our current products to generate the yield from lending markets more or from swaps and redemptions?
I personally would argue that the majority comes from the underlying being deposited into lending markets, while we cannot compete anymore with the established player Curve for swaps.
Thinking also about other protocols that want to integrate mStable’s Save, one topic that is often brought up are the redemption fees when it comes to using Save as a strategy. The redemption fees are a consideration of how often the protocol would deposit and how they would account for that. Higher fees increase the friction and reduce potentially the amounts that are deposited. In a way, the redemptionFee has to be considered as a costs upfront when depositing into Save (exit tax).
The majority of our Save revenue comes from Platform Interest, while only a smaller fraction is the trading fees. Would lowering redemption fees increase deposits into Save and therefore increase protocol revenue overall?
- Easier to understand fee structure
- Easier to anticipate the fees
- No custom fee per pool to max value extraction
- One unified fee for all, good or not?
- What fee would make the most sense? (To narrow down to a few options)