TL;DR

• Carbon has a protocol wide fee of 20 BP (basis points).
• This fee, while appropriate for volatile pairs - is not in line with the market when it comes to stable to stable trades.
• For reference, Uniswap added a 1 BP fee option (0.01%) - in November 2021 (link)
• This proposal seeks to take this one step further and introduce a fee of 0.001% on stable to stable trades. This is 1/10th of a single basis point.

Summary

• A new function in the contracts will allow the DAO to identify stable pairs that should have a fee that overrides the default fee (20BP) on a given pair.
  • The initial list is further down in this proposal.
• A new function in the contracts will allow anyone to query the fee on any pair.

Supporting Data

• The current fee on stable to stable pairs in 20x that of uniswap
• There are multiple stable to stable pairs on Carbon and they are not being interacted with frequently or at all.

Initial List of Stable Pairs to be Updated with 1/10th BP fee

• USDC/USDT
• USDC/DAI
• USDC/FRAX
• USDC/LUSD
• USDT/DAI

*Note: In order to be included in the list above, a stable pair needs to exist on Carbon. If I missed any, or you would like to add one (and the pair exists on Carbon), tell me in the comments. As time goes by, the Bancor DAO can add more stable to stable pairs to this list (the contracts cannot autonomously determine which tokens are stable).

Implications

• Gas for takers on these pairs will not change
• Gas for takers on all other pairs will rise by ~2300 (a couple cents at today’s rates)

FOR: Update the taker fee to 1/10th of a single basis point for the stable pairs listed above

AGAINST: Take no Action