Great. This was my initial proposal. I am 100% in favor.
In favor of this RIP.
In favor of this RIP.
Based on the feedback on RIP-000-002 and the feedback in this topic, it is clear the community is in favor of this RIP. Changing the status to āacceptedā and implementing it at the beginning of the next epoch (~7 hours from now).
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I think itās time to go back to Lower fees in order to test how the demand response. Donāt know if itās wrong but I firmly believe that Will help the use for arbitrage and short term gains. Plus itās pretty confuse to have different fees and gives less certainity to the users.
Big mints are gone since we jump to higher fees, the amount remains quiet equal because of the BTC price.
My small opinion. The demandās elasticity, maybe itās early to say, is up to the moment somewhere between moderate and high.
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So far in this epoch, excluding the 1625 MINT day (10/20/2020) at the start of the last epoch, the average Mints are actually higher than the last epoch (143 vs 133) excluded (143 vs 186) included.
If our goal was to raise fees to lower Mints, we need to continue to raise the fees until we see the impact we are looking for. We could very well see a whale come in and bring us well over the top of the last epoch, time will tellā¦it is interesting to watch. Hope we maintain course and raise fees again.
0.35% lets see if we can find that point where volume slows down meaningfully.
Would you like to put together a new RIP with the data illustrated by the dune dashboard? Iām in support of continuing the experiment
Yes would be necessary a new RIP. Personally I think could be a Little bit dangerous in terms of economic certainty for users that donāt participate un the community to see the fees going higher every month.
Times with other platforms growing. And, sooner or later You have to go back to the original Fee to compare what happened.
For me it, would be ok at 0.15-0.10 mints & burns. A quarter point total in-out.
Equilibrium and Lower than competitors. Lets go to catch the volume first.
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Although I agree that this could be a concern for users, it is not without precedent. All blockchain users are familiar with gas fees fluctuating (much faster than RenVM does at the moment, given that we are not yet algorithmic). These fees are essentially our gas.
Yes. I may, on one hand, say iām thinking in terms of traditional finance, but traditional finance is lowly coming and looking for understandable economic models in the space. The non- inflationary and āfees dependantā model gives REN an unique attractive.
On the other hand, I agree, blockchain users are familiar with shakes in numbers.
Iām thinking a middle future with mixed worlds or not. RenVM will have hundreds of millions per day in volume with low fees, or just a niche of 10M daily with serious discussions about the Lafferās curve.
I totally see the first. How to add nodes? More volume, not sure about the consequencies of higher fees but lets see the game.
The average mint size isnāt a good measure as it does not affect security through earned fees, the volume (times the fee size) is the measure to look at.
And it is not useful to reason about the impact of changed fees by just comparing just with the previous epoch. As you can see from this graph, there definitely has been a downwards trend, exactly how it coincides with the fee change is hard to know as other factors like yield farming are in play, but you can guess where it would be going if it is increased even more:
(this is only looking at mints)
Definitely agree with Max here. We should compare the .2% fee period * volume vs 0.25% fee period * volume. Revenue change is the key metric.
On another note, I think itās safe to say that the steady decline in mints (aside from fee increase) is likely due to the steady decline in APY on curve. From a business perspective, we clearly need to diversify our integrations in order to normalize our volumes. Excited for whatās to come with badgerdao, keeperdao, and eventually acala.
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Maker, Aave as well. Utility. And You leverage the utility (in terms of users) with lowers fees. Arbitrage etc.
Generate revenue for users- generate revenue for operators.
This is time to gain adoption and becoming ātheā bridge. Network effect. Time to the effort.
First 10-20% of nodes got some kind of involvment in the community, some sense of belonging. The next era of nodes will need āsense of volumeā. See the @MaxRoszko chart. After this period of test, lets back as low as possible ( 0.15- 0.10?). My opinion.
Growing volume while sacrificing revenue is not necessarily better. There needs to be a balance. From the way I view this experiment, thereās 4 primary factors we must consider:
- volume: value processed by RenVM
- RenVM price: mint, burn, and continue fee settings
- TVL: total value locked calculated by total assets under management
- TVB: total value bonded calculated by nodes registered + value of Ren
With these 4 factors, we attempt to:
- identify price equilibrium by testing price elasticity
- quantify how price price impacts mint/burn volume
- learn how to influence TVL and TVB to create an algorithm to maintain TVB * 3 >= TVL.
Iām adamantly against lowering fees now as that ultimately may signal to the ecosystem that we are also lowering the earning power of nodes and subsequently lowering the value of Ren itself. Lowering minting fee may also result in an increase in minting volume which would be going in the opposite direction of reaching equilibrium.
So,
Ren price: 0.5
Nodes operational: 2500
2500100.0000.50= 125.000.000 * 3= 375 M
ĀæThe TVL would be under 375M in order to keep the safetiness of the renVM?
Sorry iām out on this. Iām only writing thinking in terms of business and economic models, revenues and growing adoption.
But TVL is not volume. More mints means more burns. 0.15- 0.10 for me looks equilibrium in economics into equilibrium in safety. Yeah, intuitively. Lets see. Thanks for the feedback everyone.
My argument is that we must not only keep mint fees as is or increase them but to also increase burn fees in order to increase earning potential and subsequently TVB and ultimately the max capacity of RenVM.
I made an RFC on this that was heavily opposed. Ultimately, if we can accelerate the velocity of mint and burn volumes to such an enormous extent, price will be less of an issue, but there are rarely economic models that win on volume alone without pricing. Pricing strategy should always be thoroughly vetted and executed on by any organization crypto or not.
Yeah I wouldnāt agree on that proposal, but at the end of the day all we will need is good stadistics and a well reading of that.
Crazy yield stuff, BTC going 10 to 19, etc, generates so much noise at the moment to interpretate the numbers.
Having for example the possibility of using maker or aave in the future will give us a wider angle to examinate the elasticity of demand.
Are we moving the fees up to 0.3% or are we holding at 0.25%?
There hasnāt been a proposal to change the fee, so nothing is changing at the moment