Name: Adjust ETH mint fee to the new default 0.15% fee Category: Fees Status: Proposed Scope: Adjust the minting fee on ETH to 0.15%, putting it in line with the other host chains.
Overview
This RIP proposes to adjust the minting fee on ETH to 0.15%, putting it in line with the other host chains and stimulating a more intuitive and transparent user-experience, among other things like increased RenVM’s attractiveness among potential integrators.
Details
Point #1: As most of you know renBTC capitalization/adoption hasn’t been growing and has been plateauing for quite a while now:
And while we also know, that TVL is not be all, end all in our case, it’s hard to argue that it doesn’t matter. Community sentiment matters and community pays attention to TVL. And I’m not only talking about users, I’m also talking about developers, farm creators and such. And with us no longer having bonded REN requirement it makes sense to try to grow our TVL numbers.
Point #2: While I agree, that most users are not “fee shopping” and wouldn’t pay attention to 0.25%, I’d argue that someone looking to mint 500+ BTC is. And for the bigger players we’re encroaching way past WBTC fee territory, if my information on this is correct. For a 500 BTC mint the difference between 0.15% and 0.25% is $16 000, I’d assume some of those guys care about that.
Point #3: Arbitrageurs with their thin margins and impressive volume. We want them!
Point #4: Us having less fees means that integrators have more room for their own, while not overcharging their users. Essentially RenVM is a b2b product and I think we should care deeply about this matter. Happy end-users, happy integrators, more volume for us. Good UX for all.
Implementation
Vote on this proposal
Initiate fee changes to RenVM the following epoch after voting ends.
Of course in favor. In addition to the arguments presented in the previous proposal, standardizing all fees at 0.15% will help the “easy to understand” added to the “easy to use” for a platform that, pioneer in technology, and with the addition of host to host and the incorporation of the members of the greycore, will be in the most suitable moment to generate exponential adoption.
Regarding the original objective of increasing the fees to lower the TVL for security reasons (and assuming that with the new tools exposed by the team the problem would be solved): the importance of the TVL has been a highly debated issue and I consider that, in Ultimately, it is a matter of perspective. From the node revenue side, it can literally mean zero. A worthless metric. From the need of the crypto user, from the demand, the search for universal valuation tools has positioned the Market Cap / TVL ratio as a way (wrong in many cases as REN) to evaluate De-Fi projects. In terms of marketing and advertising, however, it is what generates visibility. A definite value not to be disregarded on the way to the point where by its own weight the protocol decouples from average metrics.
Previously said:
The world is moving towards “everything lower” and this is a long-term project.
The arbitrage can generate much more income with these margins.
Integrations, assuming an aggregate of 0.10% charge, will be competitive in terms of total costs.
Let’s incentivise large users and arbitrageurs, while allowing other protocols to piggy back off our tech and still charge a completely reasonable fee.
Also streamlines fees and makes it more user intuitive. What’s not to like.
Only question - anyone know what the fees will be for host - host when that launches? Will that be 0.30% (0.15 x 2) or will it have it’s own few structure? Either way, reducing to 0.15% across the board will make charging for host to host and easier feat as well.
I agree that standardizing fees across chains is a good idea.
I disagree with the focus on TVL, because a higher TVL will not result in higher fees for darknodes.
However, the lower fee will make integrations across chains more standardized and predictable for integration partners.
I’m curious about whether this will increase volume, as fees to mint renBTC are lower, resulting in a higher amount of burns.
Frankly RenBTC utilization has plateaued likely for a range of other reasons than fees, and I think we should be having a conversation about the UX/UI issues that prevent more utilization as well as the fact that the market seems to be rolling their own interop solutions as opposed to utilizing RenVM. Understanding why developers are making the choices they are making and why they are shying away from using RenVM more aggressively should be something the community understands well so that we can direct incentives/make it easier for teams to utilize RenVM, which is emerging as the most trusted, safe option for interop needs.
If this is accurate then lowering the fees is unlikely to have the desired impact. How certain is the team that the fee is the determining factor for the targeted audience?
Edit: to be clear I’d lean toward yes on this, but I’d prefer to know that the reasons are not assumed a priori. Has someone been interviewing decision makers who went with wBTC over renBTC and asking them why they chose that way (ie did they just look at the TVL and go with the largest, compare the fee structure, or something else?) and what it would take to change their mind?
Further to this would like some comment from the Ren Team @loong@MaxRoszko being first hand with contact from dev teams what is the general consensus from them about the current fees of Renvm. Are they pushing for lower fees? are they deterred because of the the current 0.25% mint fee? Is there anything that you guys are seeing that argues or supports this proposal?
Echoing this, I’d love to hear more from the team who I’d guess is talking to developers and users and getting their feedback on Ren VM and why others are either rolling their own or choosing GBTC.
I don’t have a strong view at this point other than to say that I think @davoice321’s insight that the plateau is likely due to other factors than fees. I don’t believe many people fee shop. That’s likely not true on the higher end but for the most part, people just want to move their assets and pick the easiest way to do so, regardless of fees.
I want to clarify that there’s no focus on TVL whatsoever. I’m merely pointing out that it’s a metric that shouldn’t be ignored completely and this proposal might help improve it (the metric).
Among the points I’ve mentioned I’d rank it at the bottom of the list:
More room for integrators to profit, while not overcharging (we’re B2B first, backend, right?)
Closer to WBTC minting fees for whales
Profit margins for arbitrageurs
Standardized fees for UX and simplicity
TVL
My line of thinking was that we’re lowering fees not to increase fees collected short-term, but to address all the points I’ve mentioned above.
Does not become a double burn+mint, just a ‘mint’ fee, e.g. 0.15%. RenVM has a special transaction type for burnAndMint transactions which isn’t in use yet but will for e.g. renBTC-Ethereum → renBTC-Solana transactions. I think theoretically that fee is independently adjustable as well so could be different from regular mints, but not 100% sure on this.
Have heard from some projects like lending protocols that e.g. 15 BPS is pretty high because users coming to lend on that chain then have to wait significant amount of time before they recoup that cost before even beginning to earn rewards on lending.
Regarding fees. Recently I talked with guys in my small defi channel and I asked them about whether they use renBTC, what do they think of fees, put up a poll to understand how elastic they are to fees and more…
Well, some people care. One guy even said that 0.15% is pretty high, because once you start farming and jumping from one chain to another “it adds up”…
So yeah, there are people that care about this. Down the line, when blockchains evolve and there will be more high-frequency stuff going on, I think we will have even lower fees on our side.
Btw loving how actively DNO are participating in the snapshot vote! Keep it up guys!
So the documentation on this is not accurate anymore? To my knowledge it was always communicated that the burn-and-mint transaction type incurs both a burn and mint fee.
I support this. I have always felt RenVM should be a high volume, low-fee protocol. Lower fees encourage activity which benefits the entire ecosystem, also RenVM is still in a growth/adoption phase and we should incentivize its use.
TVL does matter, I have been involved with several projects and the sole reason they chose wBTC is liquidity (as a pair connected to their project).
Users follow based on the integrations, I’ve had to hold wBTC quite a bit just cause the renbtc option wasn’t available. When a project is creating a liquidity pool it is expensive and limited, and they will chose the the path with the largest access to capital and that has the least amount of slippage when users are making a multi-hop swap.
Along these lines a turnkey/push button to accomplish what badgerDAO has implemented would go a long way if developers can see direct access to native BTC capital… Definitely an advantage over wBTC.
In the meantime though we do need to increase TVL if we want integrations to grow.
The volume is trending down because the entire market is trending down, lowering our fees is only going to reduce DN operate income by the % of the fee drop, which is no small sum 40%.
I doubt our volume is going to increase by this amount on Ethereum just by lowering the fees, as someone who enjoys the income we get even though the price of BTC is cut in half, I would really prefer we don’t slice that half in half as well.
Those docs are old and refer to burning and minting in the current phase, but soon we are entering the host-to-host era.
It doesn’t make sense for users to pay double for moving renAssets to another host-chain when moving tokens only does the one fee. Imagine moving wBTC as an ERC-20 token to Solana for 0.15% fee, but to move renBTC they need to pay 0.3%.
I am on the fence with this proposal. On the one hand I agree that Ren would most likely benefit especially in terms of adoption lower fees but also being a B2B service lower fees would benefit integrators. We want to incentivise as much volume and TVL and integrators as possible in the early stages to incentivise growth and market share across all chains.
Purely from a selfish standpoint I took a risk with these nodes and actually took out a loan mainly because I did not have a lot of money to buy nodes. Now this has been great but already the fees have dropped significantly. Slicing the fees significantly could potentially put me underwater with the loan repayments. There might be others like me where their financial circumstances might make keeping a node operational not financially viable anymore. This is not me complaining or anything by the way just being honest of my circumstances. Now as we all know the fee situation can change very quickly. But essentially if the nodes are not producing enough income then it might not make sense to continue operating.
So I am on the fence because I understand the potential benefits but by voting yes I am essentially shooting myself in the foot.
