Bancor

TLDR

• This proposal seeks to increase the pool fees on the PSP/BNT pool from 0.2% to 0.5%.
• The PSP pool on Bancor has the second deepest liquidity in a DEX.
• An increased pool fee will help siphon more profits from arbitrageurs to the protocol and most likely not affect volume therefore increasing APYs for the LPs in the pool.

Abstract

Deepest PSP pools on Ethereum are:

The PSP/BNT 0.2% Bancor pool with $1,276,378 liquidity [1].

The PSP/ETH 0.3% Uniswap v2 pool with $2,576,067.46 liquidity [2].

The PSP/ETH 1% Uniswap v3 pool with $1.19m liquidity [3].

Motivation

An analysis on the effect of the pool fees on pool volume conducted on the USDT/BNT pool showed that there is not enough evidence to support a linear relationship between them.

Figure 1 - USDT pool fee changes with market share before and after the Fee change. The 1000 and 2000 x axis values represent a 0.1% and 0.2% fee, respectively.

Mark’s comment on the TRAC pool fee experiment sheds some light into the topic.

https://gov.bancor.network/t/proposal-trac-bnt-fee-change-schedule-and-performance-analysis/3239/2

Increasing the pool fee will help siphon more profits from arbitrageur to the protocol, most likely not affect volume and therefore increase APYs for the LPs in the pool and protocol-earned fees.

For

1. Increase the pool fee in the PSP pool from 0.2% to 0.5%.

Against

1. Keep the pool fee in the PSP pool at 0.2%.

[1] https://etherscan.io/address/0xe950137942F446a93C8309B3a7c1407ef1975856

[2] https://info.uniswap.org/#/pools/0x4a73a7e29988f171910119d660c4dd548282bf2a

[3] https://analytics.sushi.com/pairs/0x458ae80894a0924ac763c034977e330c565f1687