Fee Restructure Governance Proposal

Summary

If passed, this proposal will result in the addition of two (2) transaction fees related to withdrawals and yields. Fees will be deposited into the treasury and managed through governance proposals. Additional details and links to the community discussion below.
Review community discussion from the link below and submit a vote.

Details

The addition of a withdrawal fee and yield fee are described below. These fees support the long standing objectives to:

  • Pay for the cost of rebalancing after large withdrawals to withdrawers. vs. passing them on to committed depositors in the pool

  • Build protocol owned liquidity for supporting the token on exchanges

  • Add assets to the Treasury to be managed by a APY DAO at a later date

  • Create an environment conducive for actions such as token buybacks

A detailed breakdown of the fees are available below:

Withdrawal Fee

  • Triggered when a withdrawal is made more than 24 hours after the last deposit.

  • The fee is 0.1% of the total amount withdrawn.

  • The goal is to keep this fee to the minimum necessary to cover slippage. It is not intended to be a source of yield.

  • Most of the time a 0.1% fee will cover any potential slippage when depositing or withdrawing from a Curve pool.

  • Only when a Curve metapool, with a reasonable A value, starts approaching a 60/40 ratio with 3crv tokens, will it potentially exceed 0.1% slippage.

  • The A value determines how skewed pool reserves can become before the prices start to depeg.

Yield Fee

  • Triggered when yield is claimed from active pools. Claims occur when auto-compounding. The auto-compounding frequency varies according to market conditions, but generally is once per week.

  • The fee is 15% of claimed rewards incentives such as CRV and CVX rewards. Base yield from pools and APY token yield are not reward incentives, and are therefore not included.

  • Consider this example, weekly claims are run and the following annualized yield breakdown is harvested:

    • 2% base yield

    • 4% CRV yield

    • 7% CVX yield

    • 10% APY token yield

  • In this example, the 15% fee would only reduce the total annualized yield from 23% to 21.35%.

  • The total is 23% annualized yield. The yield fee would only apply to the CRV and CVX yield.

  • If a 15% fee is deducted from 11% annualized CRV and CVX yield, there is 9.35% CRV and CVX yield remaining.

Current Fee Structure Updated Fee Structure
Arbitrage Fee
Triggered when a withdrawal is made within 24 hours of the last deposit.

Arbitrage Fee
Triggered when a withdrawal is made within 24 hours of the last deposit.

Yield Fee
Triggered when yield is claimed from active pools. Claims occur when auto-compounding. The auto-compounding frequency varies according to market conditions, but generally is once per week.
The fee is 15% of claimed rewards incentives.

Withdrawal Fee
Triggered when a withdrawal is made more than 24 hours after the last deposit.
The fee is 0.1% of the total amount withdrawn.

Discussion

Visit the discussion on discourse for additional details:

Vote

This proposal has two options, you can choose to vote Yes or No

Yes

The new fees will be added to the platform immediately.

No

No action will be taken