Bancor

TLDR

• This proposal seeks to increase the pool fees on the FODL pool from 0.2% to 0.3%.
• 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

The FODL pools with deepest liquidity in Ethereum DEXes are:

The FODL/USDC 0.3% SushiSwap pool with $5,229,680.09 liquidity, and $103,555.89 daily volume [1]. The FODL/WETH 0.3% SushiSwap pool with $4,387,297.68 liquidity, and $88,149.61 daily volume [2]. The FODL 0.2% Bancor pool with $2,123,999.38 liquidity, and $41,587 daily volume [3].

Motivation

Experiments and changes in fees should happen for tokens that Bancor dominates in liquidity. We have learned that we can have higher fees on pools where we have the largest moat (e.g. wNXM, AMP, TRAC, etc…). The reasons to pursue a higher fee in the FODL pool are:

• Increasing the pool fee will help siphon more profits from arbitrageurs to the protocol.
• Other major FODL liquidity sources also have a 0.3% fee.

The FODL pool’s weekly volume and fees since the beginning of the year are shown in Figures 1 and 2.

Figure 1 - Weekly FODL pool volume since the beginning of February.

Figure 2 - Weekly FODL pool fees since the beginning of February.

Conclusion

An increase in the FODL pool fees should lead to higher APY for LPs and the protocol.

For

1. Increase the pool fee in the FODL pool from 0.2% to 1%.

Against

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

[1] FODL-USDC | SushiSwap Analytics [2] FODL-WETH | SushiSwap Analytics [3] Bancor: Converter 726 | Address 0x043CA1F3Aa6939041e57d6Eb7811Cf5C6e56827E | Etherscan