Decreasing minting fees to 0.15%

With the risk of voicing unpopular opinion, I personally am not of the opinion a convincing argument for reducing mint fees has been presented.

This is simply not true. I suggest you try to get involved in some of these other projects like Aave, Compound, Maker and discuss with their communities why they are not pushing for renBTC. None will complain about the fees, the main resistance right now is decentralization. If it is not decentralized then we already have wBTC. There is no sugarcoating that fact.


I am not against reducing fees if that is what the community decides to move forward with, letā€™s however be clear on one thing.

If fees are reduced and volume shoots up together with TVL, especially if TVL reaches $3b+ levels, people will start the fud again that the ren team/community irresponsibly incentivized increase of TVL (by reducing mint fees) when the project is still in a centralized phase. And they would be correct, it is not responsible to incentivize increase of TVL when renVM is not regulated in the same sense as wBTC, it needs to be decentralized first to mitigate risk.

Also, in this scenario basically all risk is on ren team and none on node operators. The ren team cannot deliver anything if there is regulatory crackdown, so letā€™s enjoy the silence for a bit while the ren team get the chance to deliver. As soon as greycore is launched I will be in favor of all of your fiddling of fees :stuck_out_tongue:

To sum it up, this recent concern people have about mint fees to me sounds more emotional than rational. We are very close to big updates such as 0confirmation (next week), Solana integration, Badger event, Greycore launch, community AMA with ren team, renLUNA support and the regular stream of good news.

It will be much easier to evaluate the situation in a few weeks, patience is a good thing, no matter how much hype there is in crypto bullrun.

4 Likes

Thanks for the addition.

Remember that they said in Sep. in the early days of the RenVM mainnet.

The main source of the transactions is coming from the end-user, not the developers.
Developers are building based on the end-user requirements. if there is a big user base for renBTC (a large sum of renBTC supply) similar to wBTC, for sure the popular Dapps will support renBTC, if the developers are still worried, simply they can add a warning note for their users before using the ren bridge but they will not ignore such income to their project if the users prefer to use renBTC.

Popular Dapps looking at RenVM as a new project that trying to get volume from their users.

I believe that popular Dapps are watching and monitoring our project growth at the moment and could change their minds and support renBTC at any time even before the greycore. this could happen if our userbase continually grows which could happen by reducing our network fee.
Reducing the fees will fix more hidden issues for renVM.

Let us build the correct structure for RenVM that will lead us to bring RenVM as the boss in the space and enforce the popular Dapps to support RenAssets without pushing from our side. and for sure we will help them step by step once they decide to support.

Here is What makes me strongly support reducing the fees from the next epoch:


source: coingecko.com

Why we are trying to push renBTC in the popular Dapps like Aave by adding proposals in their communities while we want to enjoy the silence and keep the TVL low?

Same question here, How are we waiting for the coming events but at the same time we donā€™t need them?

The answer to these questions is the key for me.

3 Likes

WBTC
TETHER
USDC
TUSD
BUSD
GUSD

All in AAVE. All centralized. All allowed as collateral except Tether and Busd.
Why are they there? Liquidity, or potential liquidity (GUSD for strategic reasons).

Decentralization / Liquidity

If on the road to decentralization there will be no stop for months, the simplest logic says to go for liquidity.

Letā€™s not keep thinking about short-term income. The nodes will increase hand in hand with the volume and the multiplication of liquidity. Income is the last link in the chain ( price it is ussualy anticipated) ; not the first one, not the middle one.

2 Likes

Not sure what you mean here, of course users are the users. It is the developers who build the tools and integrations for the users to make that possible. Without devs you have no users.


One important thing to consider as well, we know that users do not care about the 0.25 mint fee because they pay that with WBTC without any complaints, the fee has never been an issue for end users.

I agree that lower fees will be beneficial for integrators and arb bots, there has already been discussions to have a separate fee structure for integrators like 0cf, same could be done to projects like Curve, arbitrage bots and so on. This is a separate discussion which has more merit in it imo.

But to claim that retail (end users) think the fees are too high is pure nonsense and if someone feels that is true then they should present proof to back that up.


Good question and a very important nuance to this. There are a few ways to see things.

When we as community and ren team decide to reduce fees we directly incentivize increase of TVL and it becomes a direct action by the ren team (since its centralized now) of using fees as a mechanism of adoption and control. That is how the market will see it, they will hold the ren team responsible for the growth of TVL.

Donā€™t forget the increase of mint fees was a successful endavour. We actually managed to slow down the explosive growth of TVL while at the same time not killing node rewards. Many people see it as a bad move but it did exactly what the intention was(!!)

(Yes, you should be happy TVL is reducing, it is indeed to our benefit right now.)

Let me give you an example, have a look at this tweet.
image

We all know how much chris was hating on renVM and the increase of TVL last year, now he actually seeā€™s the project as more professional and responsible, not just some pump and hype project.

I am willing to make a bet, as soon as we decrease mint fees and TVL starts growing people like chrisblec will once again start attacking and spread fud about renVM, and they will be correct in doing so, they are not wrong!

This only harms the project as the team will be forced to address the fud, deal with lawyers and take the risk of legal action and as a result be distracted from what is really important, deliver a decentralized protocol.

There are many bitter and cringe people in crypto, many projects try to attack other projects in many ways, some take it too far. It is very important that attack vectors are well thought through and mitigated before we go on a crazy marketing spree and push renVM as hard as we can.

To summarize the above, we need to be smart with our approach as we currently do not have a ready product. You keep comparing renVM to wBTC which is fine, but there is a huge difference, wBTC are centralized and deliver what they say, renVM is not ready yet.

ā€“
Now there is another way to increase adoption without tinkering with fees which I am in favor of, I believe this is the only responsible way forward until greycore is launched. And that is to educate other protocols about renVM, get the word out there, interact with others, build trust with other projects, plan for the future.

If we manage to educate other protocols and they chose to push renBTC then that will be their decision and their responsibility. That way volume/velocity can grow without the ren team being held responsible.

When we add proposals in Aave, Compound and engage in discussions in their community we are actively trying to educate them and help them understand renVM better. We are not pushing any users to ā€œgo and use renVM right nowā€. We are building the infrastructure and relationships with integrators and future developers that will benefit renVM in the long run.

ā€“
When you look at numbers right now and feel bad about not having same growth as wBTC/hBTC you are missing the bigger picture, it is the future integrations and relationships with other projects that will bring volume and velocity. I suggest you forget renVM as an end-user product, renVM is infrastructure, the most important component of renVM is the community of developers and integrations, users are just the end result of succesful partnerships with other projects.

What we as a community should do now to support the ren team as much as possible is to act as a protective shield and let them focus on delivering. We shouldnā€™t add extra risk because we feel things are going slow and we are missing out. We should help educate the crypto ecosystem about renVM, get involved, get the word out there.

Some of us are working very hard with other projects to build trust and future relationships. Interacting with other projects and gaining their trust takes time and is very tedious(!!)
If I am trying very hard to give a professional perception of renprotocol which other communities can rely on and build upon, when we suddennly make an irresponsible move to incentivize TVL growth when there is huge risk involved that just destroys the trust that has been build up.

If we reduce mint fees and TVL rockets there is nothing I can say to other projects to defend such action. We will just look like binance who try to undercut others fees to our benefit while we are still a centralized shitcoin (yes that will be the perception, not saying thatā€™s my opinion).

ā€“
Anyway, sorry for the long rant but felt like I needed to clear out some points. I honestly feel like Iā€™m wasting my time here to some degree, I find much more pleasure in trying to push renVM and educate people on why renVM is awesome instead of this neverending fee discussion. :slight_smile:

8 Likes

there is a big difference between centralized + regulated, and centralized + unregulated, renVM is the latter right now. Decentralization is the main thing stopping integrations like Aave. Feel free to discuss this with the Aave community, I would be very happy if Iā€™m wrong

I will assume that this is the main reason that prevents us to reduce the fee and increase the TVL, confirmation on this point from the ren team will be highly appeceiated and would make it clear for me.

In that case, I donā€™t think that the increased fee is the best solution during the current phase.
I propose to determine the suitable TVL (or the maximum TVL) that we can handle during the current phase which will keep us safe and declare it.

Let us say 20,000 BTC TVL is suitable. here is What I propose to do:
1- declare to all parties that our maximum TVL is 20,000 BTC during the current phase (the amount could be increased at any time.)
2- Determine the suitable fee for RenVM that will be fixed for a long time regardless of the TVL or in which phase we are.
3- Automatically prevent users from minting more assets once we reach our maximum TVL and inform them something like ā€œOur maximum TVL is reached, please try again later after other users do burns or buy renBTC from the exchangesā€

Here is What benefits we will get:
1- TVL Determined by the ren team which makes them work with more confidence.
2- RenVM fees determined by the ren team for the long term to avoid confusion for all parties in the future.
3- Large TVL issue will be fixed. (currently, someone can do a mint of 10,000 BTC or even more in a single transaction which will lead to high TVL you could not stop)
4- The ability to increase the TVL capacity at any time based on our project progress.
5- Once we reach the maximum TVL capacity, Network/DarkNode income will become a stable with low chance to decrease because there are other users who are waiting for TVL to decrease to start minting. (This may lead to an increase in the trading volume on renBTC/BTC pair in third party exchanges and some arbitrage opportunities appear)
6- it will be clear to the developers/integrators that we are only educating and building trust not targeting high volume at the moment until greycore is launched.

1 Like

This could be right, but Why we are not better than wBTC?
Even if users pay 0.25% with no issue. make renVM is super cheap which is not comparable to others.

This How ren should be even we are getting good volume with the current fee, by reducing the fee, we will get higher vol and more spread, the results may be delayed but it deserves the wait.

When it comes to determining RenVM fees, it should be based on something completely separate from What people say, TVL, upcoming eventsā€¦etc

If I was the ren team I would absolutely refuse any action that increases risk of regulatory action, itā€™s just common sense dude.

Also, I strongly suggest you stop treating ren team as some benevolent authority that steps in and decides what should be what, you are actually making the project more centralized by doing so.

We all need to behave as if the project is decentralized already, all voices count, all of us will be the governing body when renVM is ready. If you want the ren team to let the community govern then prove that you can handle it and stop cornering the ren team into demanding answers.

I can promise you they all see messages in the forum, telegram, twitter and so on and they will step in when necessary. You calling for their attention every day is just distraction from what we all know is most important, to deliver!

If you come with a proposal and get the community on your side I seriously doubt they would stay silent. Right now there simply is no convincing argument for the proposal to decrease fees.

ā€“

Iā€™m sorry to be blunt but what you say is literally suicide. ANYTHING the ren team declares will be used against them and they will be held responsible.

The more the team says the higher risk of backlash. Yes of course it would be nice to have more information about whatā€™s going on but be rest assured they are not trying to hold back information, they are trying to act responsibly.

If they go out and say the cap will be 20k BTC then they are publicly saying that 20k BTC is safe for a project that is not regulated to provide custodial services. Whether that is true or not doesnā€™t matter, you will be giving people fud material served on a silver platter.

Also dont agree on TVL cap for many reasons, one example, as soon as we reach that cap the node revenue is basically dead, we have to wait for people to burn in order to get velocity. A cap only makes sense if we had continuous fees.

These are just few examples btw, there are so many angles to fud and nonsense, the more silent the team stays until renVM is ready the better for the project. Let them focus on whats important and only make announcements when they know itā€™s bulletproof.

ā€“
What I hear from your messages is frustration over lack of information, I can understand that and it is a valid concern for someone who has invested their hard earned money in this project, but be clear that it is your own personal frustration (feelings).

The information you seek will not make any difference to what is important right now, which is to educate the crypto ecosystem and get the word out there and build relationships with future integrators. You can do this right now without any issues. We all can! :slight_smile:

4 Likes

Dude, it feels like you are not listening, renVM is not regulated like wBTC. Some jurisdictions will see the lack of KYC checks as serious issue. There is no way around that.

That is also why decentralization is so incredibly important in crypto. It does not matter if users care about centralization or not. If a project is centralized it can be taken down.

When greycore is launched that risk will be mitigated as ren team will no longer be in control. Nobody can stop renVM at that stage.

Later when renVM has reached itā€™s final mainnet stage and the project is fully decentralized the ren team will be free to tweet, troll, joke, discuss, talk as much as they want, they are no longer responsible for a decentralized protocol. No jurisdiction will be able to take down renVM.

THATā€™s the killer feature!! Unstoppable tech!! Thatā€™s why later wBTC will not stand a chance, I honestly believe wBTC TVL in future will only be about 5-10% of renBTCā€™s TVL. When renVM is fully decentralized there is no longer any reason for majority to not use renVM. Only a few players will use wBTC because they want custodial services for various reasons.


To be clear, I am not against lowering fees, I am against doing it now when there is high risk with renVM being centralized.

Ok let me try to present an analogy which might help.
Imagine Ethereum vs BSC. One is perceived as decentralized and one is perceived as centralized.

Ethereum is having issues right now with fees so BSC took the opportunity to step in and take advantage of that even though their product is centralized and inferior. How do you think the market perceives BSC now?

Sure itā€™s cheaper and easier to use now, sure many donā€™t seem to care about decentralization. However, no serious player in crypto takes BSC seriously, its just a band-aid solution until better projects are ready. Everyone knows that BSC can suddenly stop working tomorrow, one tweet from CZ can do a lot of damage.

Now how do you want renVM to be perceived? Would you like renVM to be perceived as a serious unstoppable solution which long term projects can integrate and build upon or do you want renVM to be seen as some reckless revenue chasing protocol who will incentivize volume no matter how much risk is involved?

4 Likes

Thanks for your reply.
Iā€™m sorry if I caused a disturbance to anyone.
I like Ren so much and just wanted to share my thoughts.

My view has changed already. I prefer to postpone this discussion to be after graycore launch and official governance.

Also, I prefer to close/delete this RFC or at least mark it as rejected.

2 Likes

@akram01127, please donā€™t think Iā€™m upset or that I am trying to fight you. I apologize if I come off as impatient :slight_smile:

You have very good comments and I do agree your concerns are valid, I just think we need to be a bit patient, the ren team has to go through audits, lawyers, peer reviews and so on before they disclose information and Iā€™m sure they are equally frustrated as you are, thatā€™s the irony of it all haha

The discussion you and I are having now is also good for people to see, there are very good reasons REN is undervalued right now and that is ok, people are simply scared, the people who believe in the project and have some patience will be rewarded later. Thatā€™s just the nature of embedded risk within an investment.

And on top of that people see other projects skyrocket while REN has moderate increase in comparison. So people simply get impatient which is totally understandable.

The best thing we can do is to focus on the opportunities we have now and get the word out there. Educate the market, get involved with other projects, get involved with our community fund, educate developers and people about why renVM is a very good solution and will be ready very soon

Anyway, gotta go now, wish you a nice weekend bud!

3 Likes

Thanks for the great reasoning - you are not wasting your time.

Agree, increasing TVL is not a great goal when considering it places responsibility on the Ren team. Didnā€™t think if that. Patience wins the day.

2 Likes

Agreed with @Sabobi, explained it very well and @akram01127 for great valid questions / comments.

Thank you guys!

2 Likes

Fantastic set of posts by @Sabobi, I just want to add one point: we need to constantly educate the wider crypto community about TVL and how it relates to Ren. On Telegram, Twitter, on this Forum, etc.

TVL is one of the most misunderstood metrics in crypto, and sadly itā€™s being applied to projects as an all encompassing ā€œgoodā€ thing. TVL rising? Good project! TVL flat or falling? Bad project!

That clearly is not the case with RenVM! But pointing this out is a never-ending battle. I see it misrepresented all the time with Ren, even in popular videos by thoughtful crypto analysts whom I respect (Coin Bureau was the latest culprit). Iā€™m not saying TVL is irrelevant to Ren, Iā€™m saying it must be understood in context. We can start to educate others by understanding this ourselves. Then pushing back when you see people concerned about falling TVL with no other context.

Again, itā€™s nuanced. Iā€™m not saying rising or falling TVL is good vis-a-vis Ren, Iā€™m saying itā€™s meaningless without proper context. Please do your part to help others understand this. And point out that our goal when raising mint fees while keeping burn fees low was to decrease TVL! Looking on this now as a failure makes little senseā€¦

3 Likes

Thank you for presenting an excellent point of view. I would like to confirm that the point of your argument is that

  • Lowering fees will increase TVLs
  • More TVL means more regulations
  • More regulation will make it harder to diversify

There is a consensus among almost everyone on this point.

  • Diversification is the direction to go.
  • If we can choose to strengthen or avoid regulations, we should avoid them.

What I would like to confirm is that

  • Will more TVLs really lead to more regulation?
  • How will the regulations be tightened?

So, in other words.

Raising fees is to control TVLs, which is to avoid tighter regulation. In other words, the increase in fees is to control TVLs, which is to avoid stricter regulations, so that decentralization can be achieved sooner.

I think you are talking on the premise of the above. I would like to confirm whether this is a correct understanding of the facts as the reason for the last fee hike.

1 Like

I enjoyed reading the exchange between intelligent people, far from considering it a waste of time. In fact, I consider Sabobi one of the most active and lucid members of the community, and I benefit day after day as a member, holder and node operator. So I only have to say thanks.

Personally, what leaves me in doubt about everything said in these last posts, is that the same team is evaluating a change in fees as possible after the badger integration (Max reply). A clarification would be welcome.

On the other hand, for the umpteenth time to clarify that I do not see tvl as the main metric but simply the visible pool that allows access to more ā€œmarketsā€ within the ecosystem, which in turn generates more demand for renBTC.

Finally, if the discussion is posed in terms that the drop in fees will generate a significant increase in tvl and the network will commit ā€œsuicideā€, then fees matter.

For the rest, another grateful for such a predisposition to dialogue.

2 Likes

I disagree with decreasing the fees to 0.15%, and would rather see us raise the fees to 0.3%.

I believe we can and should continue raising the fees until we have found a point where DN income is no longer increasing with each raise of the fees, as outlined in #RIP-000-003 and the effect of raising fees has maximized itself before exploring lower fees. This data collection is good for our network while being additionally beneficial in incentivizing node operators to join and secure the network. (more operators = better network).

As more competition enters the space there will be plenty of opportunities to lower the fees, but with some wind in our sail and more integration opportunities than we have developers, we should continue to price discover the value and safety RenVM brings to the marketplace.

As more liquidity-driven protocols discover RenVMā€™s value to their users and systems, we will discover how to charge the appropriate fees for this volume. We will also learn how some protocols volume will be more important to the network than others, so circling back to RFC-000-002, adding the most flexibility in controlling fees will enable our network to offer fee pricing that benefits the network and all parties.

Think on the demand side.

Darknode income and TVL is falling and you want to raise feesā€¦ Absolute madness.

I think Sabobi has raised an interesting point around the potential for increased regulations. Iā€™m not sure I completely buy that a fee change back to a previous position would be enough on its own to attract the regulators attentions - but I concede that a $100bn TVL would certainly raise eyebrows.

The metric to analyze is does raising the fees increases our income in excess of the volume it decreases by, to this minute the story has been it has been a benefit. We are all enjoying nice $800+ / epoch returns per node as a result of raising the fees, I donā€™t feel as if the experiment is over or pricing has been tested in a material way.

Further, with BadgerDAO having a fee on top of our fee, if we see a boost in volume as a result of this, it will further prove how people are more motivated by yield than by fees. The truth shall show itself soon enough.

1 Like