RIP-000-007: Adjust the ETH burn fee and the BSC mint and burn fees to the new default 0.15% fee

Name: Adjust the ETH burn fee and the BSC mint and burn fees to the new default 0.15% fee
Category: Fees
Status: Final - Accepted
Scope: Adjust the burning fee on ETH and the minting and burning fees on BSC to 0.15%, putting it in line with the other host chains, with the exception of the 0.25% ETH mint fee

Overview

This RIP proposes to adjust the burning fee on ETH to 0.15%, and the minting and burning fees on BSC to 0.15%. This would set all host-chains at the same fee structure, with the exception of the ETH mint fee staying at 0.25%.

The fee adjustment could take place after the Multichain Blitz period, with proper notice of the upcoming fee change for our users on the ETH and BSC side, giving time to anyone wishing to bridge their BTC to one of the other host chains to only have to pay the 0.1% burn fee.

The rationale for this is the same as in the previous RIP-006 proposal: that we’ve observed that the primary reason people bridge assets like BTC to host-chains is because of earning yield. 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 20-100% or more APYs.

Details

  • Adjust the ETH burn fee to 0.15% (whilst keeping the 0.25% mint fee)
  • Adjust the BSC mint and burn fees to 0.15%
  • Initiate this change roughly a week or two after most of the Multichain Blitz chains are launched and available to everyone

When direct host-chain to host-chain bridges are up, it will be likely that users will be moving assets such as renBTC across host-chains for trading and arbitrage use-cases. It will then be prudent to revisit the fees and work out how they should work when someone for example bridges renBTC on Ethereum to renBTC on Solana, so that it does not become prohibitively expensive paying both a burn and mint fee, given the current levels we have and are proposing to increase.

Implementation

  1. Vote on the proposal
  2. If accepted, initiate the change after the Multichain Blitz is over
8 Likes

Although I understand the history of attempting incremental fee changes, 5 basis points at a time,

There are other use cases that support much higher fees.

For example, as you say, yield farmers are earning hundreds of percentages, even when yield farming stablecoins on both sides of a liquidity pool. For people with smaller amounts, they are paying much greater percentages in network transaction fees on the host chains to begin with. RenVM could be taking 1% or even 2% (or even more), instead of fractions of a percent.

Now, you might say but there are other bridges that RenVM competes with!

But are there? Most users are already using the other bridges because they are good enough.

But people with contentious transactions use the Ren bridge because they don’t want validators to have any discretion on their ability to get to a more secure permissionless blockchain. BSC users have to use RenVM, because the Binance bridge is discretionary and not even instant and has transaction limits and IP address blocks. Just the process of moving funds to different addresses and switching VPNs is a nuisance, if they haven’t already written a script to do it for them.

RenVM can be charging a lot more. I propose studying the user stories deeper.

4 Likes

I am in favor of this proposal. RenVM is one year old proven, robust, smooth and secure protocol. People feel comfy using it and to be fair, fee is insignificant. Quality costs and we have to charge it. I think this proposal is rational and yeah, we will monitor the progress and adapt it accordingly.

3 Likes

Yes, 0.15% for mint and burn in BSC is fair enough.

1 Like

Makes perfect sense. In favor.

1 Like

I also strongly support this. Ren has been proven and reliable for a year now and I don’t think users are sensitive to fees. Let’s try it and see how it goes!

3 Likes

In total support! Strongly agree as well

1 Like

Yes, it’s proven to be a reliable system, and the fees are still negligible. in the grand scheme of things. It’s a small premium to pay for a reliable and safe network, good times or bad, and like ‘farmerjohn’ says, a bigger premium could easily be levied in the future. The world of Crypto does have it’s insecurities, and a premium charge for a premium safe service makes sense.

1 Like

Strongly in favour of a homogeneous, low fee consensus. If 0.15% is emerging as the current standard, then I support this. However, should this proposal pass, the ETH mint fee will inevitably need to be addressed.

1 Like

Agreed that user stories/data should be studied and utilised to support fee proposals. Nevertheless, the implication of your stance on fees here is that Ren targets a niche within a niche or a subsegment of a still nascent segment. Quite curious how you would develop such an argument for a project in its early growth stage? In essence, it imposes arbitrarily low ceilings on uptake and ambition.

Here is the official vote for the proposal: Snapshot

It’s live for 7 days since we have time before the proposed change would go into effect! Vote :ballot_box: :slightly_smiling_face:

2 Likes

Is there any analysis on how fees can affect revenue when arbitraging between chains?

I support this proposal

1 Like

Agree on having an uniform fee schedule

1 Like

In favor. Might be good to have equal fees (for a start) across all chains.

I think it’s important to look at the competition. So what is WBTC charging?

I support this proposal!

When would it be up for voting?

It’s already up on snapshot :slight_smile: @JBMasterCrypto

Voted in support of this proposal!

Will support this proposal. I personally agree with @farmerjohn that fees could be higher still. I think they will end up higher, when you look at the utility provided by RenVM, the level of rent-seeking people are already accustomed to in Legacy Finance and the obvious point the adaptive-yet insignificant impact of mint/burn fees next to the ludicrous returns people are making in DeFi.

You’ve got dApps like bitcoin tumblers out there charging 2%-5% just to send a (private) transaction. Fifteen basis points for true cross-chain portability? Pff, let’s try fifty.

I will also point out, from a business perspective, that raising the price on your product is the absolute fastest way to boost the value of equity in your company (that means REN tokens!). Although you only want to do this in periods of sustained and increasing demand. I don’t think we are quite there yet.

So let’s pass this, get past the blitz, get the protocol decentralized and the community fund rocking.

Then we use the CF to fund a big press campaign and raise prices into that.