RIP-000-006: Increase the initial fees for new host chains

Name: Increase the default fees for new host chains
Category: Fees
Status: Final - Accepted
Scope: Increase the minting and burning fee to 0.15% for future host chains that are integrated

Overview

This RIP proposes increasing the initial minting and burning fee for all assets on newly integrated host chains to 0.15%, from 0.10% previously.

The rationale for this is that we’ve observed that the primary reason people bridge assets like BTC to new chains is because of liquidity mining programs. And those type of users would not be particularly sensitive to the fee being either 0.10% or 0.15%, since they are likely getting 30-100% or more APYs.

Details

Many new host chains are rapidly going to be coming online over the short term. And we’ve seen that in this multichain environment, projects are competing for liquidity and users, often with high liquidity mining incentives. This makes it sound for us to adjust our fees, without needing to worry much about if it negatively impacts the formation of liquidity on new host chains.

Long-term this can be adjusted up or down based on demand and use-cases. Reasons for lowering it could be because high-frequency trading and arbing is occuring on some platform where we could actually get more returns by lowering the fees, in certain situations.

Implementation

  1. Vote on the proposal
  2. If accepted, use the new fee value when deploying the gateway contracts on the new host chains
13 Likes

Strongly opposed renASSETS need to cement their position in new chains ecosystems as the de facto versions of those assets growing big quickly is of up most importance imo .

7 Likes

Seems like a reasonable percentage to aim for with the integration of the new host chains. I can’t see it deterring volume and it’s still less than our current ETH minting fee of 0.25%. Happy to support :white_check_mark:

  • Shilliam.
4 Likes

Strongly support.

First of all, the team has insider knowledge based on talking to different integrators so I assume the team is realizing they’re leaving money on the table.

Also, what people who oppose fail to see is that it doesn’t matter how much fees RenVM charges, the integrators are not incentivized to lower their fees just because you charge less.

Look at Badger integration. They are charging 0.5% burn fee and we only get 0.1% burn fee. On the mint fee they also charge 0.5% burn fee and we get 0.25%. Whether RenVM charges 0.25% or 0.1%, Badger wants its 0.5%.

8 Likes

Strongly in favor of raising the fees.

I am further in support of raising the BURN fees for Ethereum as well, it has proven that our volume remains strong in both MINT and BURN, and this seems like an easy way to increase our income thus incentivizing operators to fire up nodes rather than shut them down.

4 Likes

I’m in strong support of this. The reasoning for an increase in mint/burn fees is sound, especially in the context of what users can earn from liquidity mining programs.

The best evidence that fees may be less of a concern for users is the BadgerDAO integration where there is a fee on top of the RenVM minting fee for their bridge. The incentive is participating in liquidity mining programs and volume was strong despite the RenVM + BadgerDAO fee.

5 Likes

Strongly support for the proposal.

3 Likes

Sure let’s try it out.

As for Badger Bridge and the fees they charge, I have heard a few people complain their fees are too high. Wonder how much more volume they would get if they were lowered a bit…

But .15% isn’t too much of a hike for us, for new chains.

4 Likes

I also strongly support this.

DeFi users as a whole seem indifferent to fees, especially when whatever is on the other side of that fee is promoting a strong fee that they’ll earn. They don’t seem to fee shop when we’re talking about basis points.

A great example of this is KeeperDAO’s rather steep 0.67% deposit fee to turn ETH/WETH/DAI/USDC/renBTC into their k-wrapped version. Since APY percentage they offer is significantly higher, it makes it easy to look past the 0.67% deposit fee.

3 Likes

Personally I would do 0.2% mint and burn for all chains for now. That said I would support if this is what is put forward.

3 Likes

Hello fRENs!

Thanks for this proposal Max. I strongly support.

Is this going to be a live vote on snapshot?

2 Likes

I support this proposal. I would suggest that we keep the fees the same for all chains, therefore reduce the mint fee from 0.25% on Ethereum to 0.15%.

I feel this looks better from an optics and user point of view.

4 Likes

Not in favor of increasing initial fees. These ‘tiny’ fee increases affect future growth of investments.for renVM users. The fees all pile up in DeFi, swap fee, gas fee, BTC fee, with a withdrawal fee, performance fee, and management fee.

We used to complain about 12b-1 fees, and Class-A, B, and C funds in traditional investing.

2 Likes

Strong support here as well :call_me_hand:t2:

2 Likes

I am really against. I would prefer to get network effect and then raise the fees. They are some bridges already implemented. Bridging Fantom and Ethereum is dirt cheap using “multichain.xyz”. See link bellow

2 Likes

I support this. Ren assets are already building network effects, and a 0.05% increase isn’t going to affect that. Volume on new chains will come from partnerships on liquidity mining as Max mentions, and with those yields, the minor fee difference will be irrelevant.

2 Likes

Seems reasonable to me, so many fees these days it’s almost like background noise anyway.

1 Like

In favor of this as a darknode holder I don’t see the minor rise conflicting with usage rate

1 Like

I’d vote in favor of this proposal at this time.

But honestly I’m a bit concerned about the stacking of burn+mint fees once host <> host transactions go live.

I would feel more for 20 bps mint and 10 bps burn. A burn and mint tx would add up to 30 bps. With this proposal a burn and mint to Ethereum would add up to 40 bps which I feel is too steep, at least to start with.

2 Likes

With this logic why not make fees comparable to Metamask native swaps at .875% ? Ren Team seems deadset on killing their own product before its even been a year.