Bancor

TL:DR

• Without testing, nobody knows the optimal fee for the ETH/BNT pool.
• The fee has been at 0.1% for a long period of time and data on performance already exists for that time period.
• This proposal suggests a fee increase to 0.15% in order to evaluate any changes in volume, fees generated, vBNT burned and fees/TVL.

Current Fee

The 0.1% fee associated with the ETH/BNT pool has been static for a long period of time. Certainly long enough for a wealth of data on:

• Volume
• Fees
• vBNT
• Fees/TVL

Now that we have a baseline measurement, this proposal suggests that we increase the fee by a very modest 0.05% in order to monitor the consequences on the measures above.

If this performance of the protocol improves, a future proposal could suggest a further increase. I performance sufferers, a future proposal could suggest a reduction in the fee.

A Philosophical Argument

The Bancor Protocol has many parameters that can be adjusted in order to fine-tune its economics. Another such example would be the Vortex Fee.

This proposal argues that in the rapidly changing world of DeFi and AMMs, we should actively be experimenting with and testing these parameters in order to consistently improve the performance of the protocol over time. This approach is similar to Toyota’s Kaizen philosophy.

To quote the great Mr Dylan, “he who is not busy being born is busy dying”.

A Rational Argument

The chart below is a chart from Bancor’s public Dune Dashboard and I suggest we use it as a base line.

If fees and APYs increase, then it is a strong signal that the change had a positive effect.

*Note: this will actually be evaluated statistically by controlling for other factors such as TVL change, total Ethereum DEX volume and more factors.

Voting Instructions

To support changing the fee to 0.15%, vote FOR

To oppose changing the fee, vote AGAINST