When will we have the discussion about increasing fees for DN. It’s quite obvious adoption has taken place. It’s a little annoying the team is so quiet and afraid to broach the subject.
I think it’s worth discussing. I am not personally in favor of mint burn increase.
I am however in favor of adding continuous mostly to experiment while Ren is still “small”, to get people used to then peg not being 1:1, and to test integrations such as compatibility with the continuous fee and generally be thinking about it such as building front end API to display BTC value, not renBTC amount
I’m completely against the idea of a continuous fee. I feel like users would be ready to give up on using a decentralized option to using a centralized option to save money. We are just a bridge nothing more at this point. What is stopping a user from going to BTC to WBTC on a centralized exchange. We need to stay competitive!
I personally think coming up with better ideas to drive revenue is a superior task then taxing users for our services. I like the idea of creating our own DEX that will sit on top of Uniswap or any of the other DEXs out there. Imaging a user can go from BTC to any ERC20 token in one transaction using the RenVM. We could bring in tons of money this way.
As it stands users who want to go from BTC to any ETC20 have to make 2 transactions. BTC to renBTC to ERC20. We can cut that down and help users save gas and time etc.
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Why should all these people be making all this money on the backs of darknodes. Without DN there are no fees. There is no renvm. There is no Ren. You’re looking at it backwards. The backbone and core are the DN. THEY GET NOTHING compared to what people are making off our nodes. Also. Fees are higher on every other platform. Adoption has taken place. partberhisps are ongoing. Being stupid here.
Kev,
Let’s make something clear. We are both on the same page. We both want more value for REN holders and Darknodes. I just don’t want to see people stop using it based on continuous fees. There are so many other ways to bring in additional value without having to stunt our growth.
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I would argue continuous fee is the most typical fee structure for a custodian. Keep in mind curve will continue to rebalance and arbitrage their pool so people would gain additional yield for depositing renbtc if theres less people adding it to the pool. Meaning higher yield if our users actually dropped off for those who stay. Its a good time to start to balance between being a decentralized gate way and a custody
Edit: additionally a 1% fee would be nominally very low given rates on yfi
Edit 2: the fact that many custodies in crypto dont currently charge doesnt mean they wont. Look at 401k managed custody at about 1-3%
But Big,
What stops someone from circumventing renbtc all together to avoid those fees and still get on ETH blockchain? BTC - WBTC ?
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With the form of continuous fee proposed, renbtc ≠ btc
If you no longer have a one to one ratio with btc, that is a Big problem
I realize this. I dont see it as a problem. Front end API would translate 1.1 renbtc is 1 btc, then 1.5 renbtc is 1 btc. The public wouldn’t even need to see that part really. Renbtc should sooner than later not be 1:1 and it could even be a mistake for it to have been set that way from the start to give people the impression thats what matters rather than the value is pegged and the value has a specific known fee
Edit: such as i have 1 btc worth of renbtc today, end of year i will have 0.99 btc worth of renbtc. The actual renbtc could be 200000 and then go to 202000
Edit 2: i do realize my math is not correct and the renbtc amount wouldnt change it would be the multiplier but you get the idea i think
i think ren brings a lot of value that no other network provides. Signers for tbtc will need massive incentives to keep working given their eth has to be 150% of any minted btc.
My main problem with continuous fees is loosing the 1:1 peg between BTC & RenBTC.
Is there anyway to have continuous fees while keeping the 1:1 peg intact?
I definitely think we should avoid introducing continuous fees for as long as possible. Increasing the mint fee seems the logical first step to take.
I think that losing the 1:1 peg with BTC will be a psychological barrier for renBTC adoption.
I will be posting an RFC for changing minting/burning fees soon (hopefully in the next day or two). It will not include any proposal to introduce the continuous fee, as I believe we should avoid it if possible.
Briefly though, the RFC will propose an algorithmically self-adjusting fee that slowly creeps up until volumes are observed to deviate from the “norm” (measured as time-averaged over an adjustable period). At this point, the fees stop increasing, or even begin decreasing again (depending on how much deviation is observed, and how much inertia we want fees to have). The idea is to let the fees self-adjust and arrive at an equilibrium with demand.
I think there is enough adoption now to consider increasing fees if it is true that demand is high. However, without data, this is impossible to know. So, getting data is the first point of order.
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That’s great idea. Fees depend on demand.
100%. Adoption has taken place. Partnerships are in place and moving. It’d a no brainer. Ty
Really pleased to hear it Loongy - I had the same thought of a self correcting mechanism based on volume when considering the best way forward since I too am opposed to the continuous fee - unless absolutely necessary - given the simplicity and attraction of the 1:1 peg.
I’d also wondered about automatically reducing the burn fee while increasing the mint fee (during times of under collateralisation) with the possibility of even offering negative fees for burning (ie paying people to burn renbtc) should the amount of renbtc minting prove unstoppable. Obviously a ‘nice’ problem to have but increasing mint fees even to say 1% might not be enough to maintain collateralisation if attractive apr rewards are being offered elsewhere.
Obviously this is where early testing and data collection can come in handy…
Keep up the great work!
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I like the idea of an algorithmically self-adjusting fee.
I think each asset should potentially have its own fee. This would allow us to remain competitive and react to changes in demand.
Please see my post in RFC-000-002: MultiVariable Fee Control Proposal
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I definitely agree that each asset should have its own fee. This should be the case for each chain too. For example, BTC/toAcala should be able to have different minting/burning/continuous fees compared to BTC/toEthereum.
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I understand the value of adoption, but if the volume and REN price go up a lot before we have a large diverse group of node operators and only whales can become node operators, then maybe we can’t ever get to decentralization! The continuous fees seems to be a good way to get us to decentralization by reducing the value locked while increasing fees to node operators.
I see almost no competition for Ren Protocol if we are a diverse world wide group of independent profitable nodes. But if we are not decentralized, then there are many competitors and more to come!
Many projects under value decentralization or push it off to later, I hope that isn’t going to happen here.
Please tell me why not to worry!
Newbie here - so the fee is only from minting and burning? I’m not sure how the network can sustain on this one time payment - the minting far outweights the burning and there’s only so much stuff to mint.
Eventually there has to be some way for the DN to make $.