Perhaps Max can chime in, but it sounded like the core team’s concern with lowering the minting fee without its own dedicated governance/review process is that it would be a security risk they are not willing to take, and not the type of code you change for a promotional period.
The subject of discussion is the B&M fee. I also think we should seek to reduce minting fees. But doing so as part of this vote would likely slow things down as we wait for code reviews and testing, and put us even farther behind the curve.
Our best shot at user acquisition with what it seems we can do safely and quickly is to strip away the costs on the new functions to give users their sandbox.
@Liberty We certainly need input from the team however regarding setting of fees it has always been advised that for the change of minting or burning fees, this is something simple to do. So this assumption that it would take further reviews etc may not be accurate.
Just a small comment, when fee change voting was proposed by the team, it was done because it was assumed the change would facilitate Greycore transition but there was not a benchmark or goal of how low this TVL needed to go in its relation agains TVB.
From Loong comments in the RIP: “we do not have an exact target TVL in mind but less is almost always better”. This is a very subjective way of assessing this issue.
Security fears were also explained on the basis that: “ A core part of the RenVM security model is its ability to regulate TVL against TVB by adjusting minting and burning fees” so as we have seen a reduction on TVL (and TVT) we have also seen a reduction on TVB which does not necessarily help with this security model.
My point with all of this is that we need to asses everything in the right context and taking into consideration the effects of these decisions have had and whether they have been effective. Now that we are moving to H2H I believe is actually the best time to review some of these fee assumptions in order to put ourselves in the best position moving forward.
Re-reading this convo in the morning with a fresh head makes me think that you guys somehow think that I have expressed any opinion on our current Mint and Burn fees, when this is not the case. The topic of this RFC was Burn&Mint fee and this is what I’ve been discussing.
If we go with my plan and Mint and Burn fees are reduced as well, than I’m 100% certain that we will take the bridging world by storm! This would be my ideal scenario.
But as it stands currently, we’re lagging behind big time and voting for a bigger entry-barrier into RenVM is not smart (burn&mint fees on top of minting fees). THAT is my point.
Even in the extremely unreal scenario, where DN income doesn’t grow this year (it will grow because of mint fees!), but we become a #1 bridge with a huge volume and userbase lead - that would make me a very happy DNO, because THAT substantially increases our chances of long term success.
I agree with the sentiment above expressed by @BlockchainBard and @Maggie. The Mint fee will have a critical play in the h2h/burnAndMint initial success.
I totally understand the need to keep the TVL “low” for security/accountability purpose.
But we are also going to launch a new feature in the middle of a highly competitive landscape, where competitors already make 200M$+ in daily volume and are even partering themselves (Anyswap + Thorchain?).
In order to succeed, we need new h2h assets to be liquid enough.
We can’t bootstrap that liquidity while also sending the message “we don’t want you to mint so we raised the mint fee high enough to discourage you”.
We (the community + the core team) could agree on a TVL target, where we would rise the entry fee again if exceeded.
This would give us a quantitative TVL target, so we could let the new H2H assets liquidity grow without “feeling bad” until that target is met.
I’d also love to see some team members step up and give their opinion on this.
In order to find a compromise between “we need liquidity” and “we need the TVL to be managed”, here are my thoughts regarding the RIP following this RFC:
We use the voting mecanism @Thomm mentioned (no weighted average)
We vote for a burnAndMint fee
We vote for a TVL target that gives enough room for h2h assets liquidity to grow
We vote for both a new Mint fee and Burn fee that are valid under this TVL target
Combined with a professionaly organised and coordinated marketing campaign, this is a plan where I would consider voting for either a temporary extremely low (0.01%-0.03%) or free burnAndMint fee.
Love the discussion and the engagement here (and glad you also consider lowering the Mint fee @Arviee)
I agree with having a separate RFC/RIP for the purpose of lowering individual mint and burn fees, perhaps set to a “trip” threshold as @Woodgast has suggested. Tacking that onto this RFC/RIP both makes it harder to pass and bulkier to implement.
What do you all think of posting an Rfc: “Temporary reduction of Mint and Burn fees to bootstrap user base” and we can discuss what would make us competitive on the marketplace. We could set a threshold of perhaps $3bn TVL, which would put the fees back to where they were after a 300%-ish growth from where we’ve been trending.
Currently creating a separate RFC for minting/burning fees It seems there’s enough demand from the community. I don’t have time to write a full one out just yet, so I’ll create an ongoing RFC and you can share your concerns there folks (link pending).
I think expanding this range to .03% is a good move to remain generally competitive. Meeting or beating competitions price should also be factored into the fees charged as well. Coin specific fees should also meet or beat competition.
I’d like to reiterate that the 0bps for 3+3 months suggested by @Arviee is a TEMPORARY solution as an (aggressive) user acquisition strategy to regain lost ground and expose users to RenVM that may not have used it before. At the end of the 6 months we would have the opportunity to do a more holistic data-backed analysis of user behavior and set a long term fee structure for all three transaction types at the same time – a fee structure that mutually benefits DNOs and end users.
At this point I am in favor of MintAndBurn fees at 0bps for 3+3 months, as well as a temporary reassessment of the Mint fee.
@SeekingKnowledge Although we will comment in two separates RFC I believe this subject should be approached as an overall fee strategy review and wonder whether both fees should be put up for only one RIP for the community to vote
.01% burnandmint fee (spam prevention as Sabobi pointed out). Any higher and I’m not sure we have a chance. Those chasing yield will piecemeal a crosschain transfer over multiple bridges in order to save a few % points. I’m one of those people.
Lower Mint fees (very low) to promote adding liquidity as H2H needs to rapidly expand.
It feels like most people want “winner takes all” type of voting so will setup RIP’s and snapshots like that. If anyone is against this please make sure to raise your voice
The RIP wont happen until next week so hopefully this is enough time for people to react.
Hi! @Sabobi fore doing so, please check the post in general ‘Temporary decrease Minting….’ where creating one Rip instead of multiple is being considered
The concept of providing a service for free may be unintuitive for most - why will a developer push out a new feature for free? especially when countless hours are invested.
There are certain parallels we can observe in existing business landscapes. Trade reliant countries tend to push for “Free” trade or “Close to Free” trade status. We tend to see prosperity follow these countries (Dubai, Hong Kong, Singapore). Ease of setting up businesses(low tax) attract capital and wealth and competition.
REN’s value proposition is that it is a layer Zero and it allows various Dapps(Varen and Catalog) to utilise this layer zero and offer more services to users. To introduce more fees to a base layer protocol means that Dapps ontop of REN will have to cut their profit margin. If that is the case, it will be a hard sell for Dapps to build ontop of RENVM. the ecosystem suffers and we lose market share.
I tend to believe the REN’s vision is to attract Dapps beyond Varen and Catalog. If we manage to get an ecosystem up and encourage competition between the Dapps, we wouldnt have to worry about being subpar against the other bridges outside of REN.
The coming months is critical in that we need to increase the user base of REN and attract Dapps to build upon REN. With an ecosystem, there will be a larger user base, and the volume will flow.
Zero H2H fees:
1)Higher market share
2)more users => more stakeholders in REN (higher REN price)
3)More dapps building ontop of REN (Long term)
DNO income is not substantial now and having a few additional bps fee will still be inferior to other yield generating assets.
The better bet will be on growth => higher probability of ecosystem to thrive
For DNOs who feel that they are missing out on the addtional income - Growth will bring in higher REN price with more stakeholders.
Thanks for the write up. Very clearly outlined. I would definitely favour the low fees high growth approach. My only concern is that whatever approach is decided, that it is a long term approach. Talk of “raising fees later” in some of the comments actually presents a risk to projects considering adopting RENVM . Personally I feel that the fee movements and threat of fee changes has damaged adoption to date. Of course - fees should be able to change but very infrequently and by very small amounts. That way adopting projects can be certain of costs associated with using RENVM. JMHO
I agree that we must remain as competitive as possible. Fees should be as low as possible. When competition heats up, and markets become more efficient, volume and usage will be driven by (a) perceived safety of the protocol - security first… and (b) cost efficiency - keeping fees lower than the competition. Of course, we also need integrations with the major players, and our fees should impose addition friction to the lego pieces being built around Ren and the DeFi space more generally.
Let’s also remember that Ren is one layer to the defi ecosystem we are building. Other partners, like Varen and Catalog, will be building on top of Ren. If all of these different layers seek to extract fees from end-users, we must be mindful not to price us out of the market … or deter other platforms from tightly integrating our suite of services. If we are competitive, volume will come in droves. We just need to make sure we occupy a bigger slice of the cross-chain market share (and mindshare). We are still early, there is time to deepen our presence in the cross-chain space.
I will support the the lowest possible fee structure. And if I were to extend my imagination a bit, I might also be comfortable setting tiers, where volume of a certain amount would enjoy preferential fee treatment, and these thresholds could be coded into our contracts. For later, when we get some key deliverables out the door.
Atm I’m sitting here and clicking through different routes on Synapse bridge and the more I click and count, the more I think that 0.1% BurnAndMint is a perfectly decent choice… will get back to you once I get some info in a presentable way, their bridge fees are confusing with both negative and positive slippage and weird high and fixed TX fees…
But one thing I’m certain of now is that even if we go with 0.05% fee we’ll be extremely competitive! But yeah, 0.1% and 0.075% are viable options as well.
I’ve been also thinking about Multichain (Anyswap) being “the leader” and you know that might be the case, but the gap might be A LOT smaller than what they’re showing in their stats. I mean some of their TXs are free, they operate in blockchains were TXs are nearly free as well… You get where I’m going with here?
Yeah, the volume is huge, but we don’t know how many people are making those TXs, how many unique, real users they have…
…what I’m saying is that I’m not sure there’s a need to go with free after all. Low? Definitely. Free? Not so sure now…
