Name: Introduce minimum fee cap for small RenVM TXs
Scope: Introduce minimum fee cap for small RenVM TXs in order to optimize income potential from smaller mints and burns
This proposal aims to optimize income potential from smaller mints and burns by introducing minimum fee cap. Practice which can be considered an industry standard and to which users are well accustomed to.
This cap is especially beneficial, because it scales incredibly well with RenVM’s growth (which we’re expecting) and overtime can be a nice addition to our income not only in % compared to what we’re getting from small mints & burns now, but also in absolute $ numbers.
At the time of writing our competition has already implemented min caps and here are some examples:
BEP ETH → ETH ETH - min fee is 0.01 ETH / ~$20 (multichain)
FTM BNB → BEP BNB - min fee is 0.0220 BNB / ~$6.7 (multichain)
FTM fUSD <-> ETH fUSD - min fee is $15 (multichain)
BEP BUSD → ETH BUSD - min fee is $20 (multichain)
BEP YFI → ETH YFI - min fee is 0.000400 YFI / ~$11 (multichain)
FTM YFI → ETH YFI - min fee is 0.000800 YFI / ~$23 (multichain)
anyBTC → BTC - min fee is 0.001 BTC / ~$32 (anyswap)
You get the picture. Even if we consider the fact that most of these min caps are only for one-way swaps and you divide that number by 2, it’s still fairly high. But it is my firm belief that min caps is a good practice for the protocol’s bottom line, which automatically benefits both DNO and the Community Fund. Thus this should be implemented, just with more user-friendly and respectful numbers.
To illustrate the benefit of min cap introduction, using sticks and stones, and my “hello world” knowledge, I took 900 latest RenVM’s transactions and filtered by mint/burn amount less than 0.11 BTC (because it roughly translates to making less that ~$5-$6 from a TX, which I think is a reasonable cap, but obviously this is open for discussion).
This resulted in 341 TXs out of 900 (which also included non-BTC mints & burns, but the amount of that is negligible), so roughly 38% of all TXs are smaller than 0.11 BTC.
After this I calculated the average mint & burn amount, which resulted in ~0.03345 BTC / ~$1060. So roughly we’re making $1060 * 0.0015 = $1.59 from each transaction. Or a total of ~$542 for all 341 TXs (a bit more if we account current mint fee on ETH).
If we introduce min fee cap of only $5, than that’s a 341 * 5 = $1705 collected in fees from the same user group, during the same slow volume-wise time period.
To put this into perspective - this is a 314% increase!
And I want to reiterate, that this will scale incredibly well, once RenVM gets more adoption.
- Gather community sentiment on the overall concept of this proposal
- Discuss possible fee structure
- Reach consensus on the fee structure
- Implement min fee caps into RenVM’s code