Option 3 is the best. I use the protocol a lot and I’ve never once scoffed or paid attention to the few Ada I pay to use it. People are going to pay the fee knowing it’s to maintain and improve a service they love.
3 Likes
I agree with this. 50% reduction is a lot!! It might reduce APR by 50%.
Option 2 is a much better option
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The 1% could also be taken from the Ada that goes to Stability pool providers. So when a CDP is liquidated, the breakdown would be:
107% to SP providers
2% to INDY stakers
1% to DAO Treasury
Instead of:
108% to SP providers
2% to INDY stakers
Another idea would be to take only take a percentage or two from iUSD CDPs that are liquidated since they have a minimum collateral ratio of 120%, so there is more excess ada that could be distributed to the DAO treasury and the reduced ada for SP providers would be less noticeable.
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It seems to me there are several good approaches we can take to generate revenue. Personally, I think a combination of all of these could be the path forward. So revenue generation could look like this:
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Increase the withdrawal fee to 2.25% and allocate the .25% to the DAO
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Implement a transaction fee of 1 ADA for the DAO
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Charge a .25% fee for the dex aggregator
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Reallocate the PoL from Sundae, consolidate it all to Minswap for Farming. Ada earned is kept in the DAO and Min farmed is sold to pay Indigo Labs.
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Adjust the CDP liquidation breakdown to:
107% to SP providers
2% to INDY stakers
1% to DAO Treasury -
Have the DAO stake its tokens in the INDY protocol to generate ADA rewards.
5 Likes
Some of the fees below are already implemented, other could be as an additional type of fees:
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Minting Fees: The platform could charge minting fees for the creation of synthetic assets. These fees could be based on the amount of collateral or liquidity that the user provides to create the synthetic asset.
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Trading Fees: In addition to transaction fees, the platform could charge trading fees for buying and selling synthetic assets on the platform. These fees could be a percentage of the trade value or a fixed fee per trade.
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Staking Rewards: The platform could offer staking rewards for users who stake their tokens to provide liquidity to the platform. These rewards could be in the form of additional tokens or a percentage of the transaction fees generated on the platform.
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Governance Fees: The platform could charge governance fees for users who participate in the platform’s governance by voting on proposals and decisions. These fees could be a percentage of the tokens held by the user or a fixed fee for each vote.
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Data Fees: The platform could charge data fees for providing real-time market data and analytics to users. These fees could be based on the level of access and the amount of data consumed by the user.
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Listing Fees: The platform could charge listing fees for new synthetic assets that are added to the platform. These fees could be a one-time fee or a recurring fee for as long as the asset is listed on the platform.
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I also see additional revenues stream that could be brought through increased TVL and therefore more fees generated from the actual protocol without adding more fees:
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User incentives: Indigo could offer incentives to users to encourage them to use the platform. For example, they could offer a reward for users who make their first trade or provide liquidity for the first time. These incentives could be in the form of additional tokens or a discount on trading fees.
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Referral programs: they could implement a referral program where users can earn rewards for referring new users to the platform. This could be a great way to encourage existing users to promote the platform and help grow the user base.
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Educational resources: they could provide educational resources and materials to help users understand how to use the platform and the benefits of synthetic assets. This could include tutorials, blog posts, and other resources that help users get started and feel confident using your platform.
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Social media and community building: they could focus on building a stronger social media presence and community around the platform. By engaging with users on social media and creating a sense of community, they could create a strong brand that people are excited to be a part of.
If they focus on user growth, i think they can attract new users to Indigo and increase the TVL, which can generate additional revenues.
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Im leaning towards something like this where the fee’s are calculated differently for each type of transaction while at the same time being small enough to not disincentivize anyone. The worst thing we could do would be raise fees to the point that users are even the slightest bit discouraged from transacting. Fees should be mostly insignificant for the user, but with scale and intricate design a revenue stream for the Foundation and Stakers.
Some fees could be a small flat rate while others a small % and all could be affected by the amount of $Indy the user has staked in governance or even a promotionally incentivized Stability Pool. Fees (disincentives) could be offset by discounts (incentives) and encourage the right kind of engagement while still benefiting the Foundation and holders.
With PWGs coming online soon Im anxious to get the opinion of the Labs and ask some questions regarding usage statistics and reasonable usage projections. What parts of the protocol see the largest spikes at what times and how many of those are likely bots. Bots could be the most valuable user of the protocol and the most vulnerable to fees IMO. Fees can really be a wet blanket if not thought out carefully. There has been a lot of great ideas floating around on this topic though and Im looking forward to more info from the Labs.
4 Likes
I agree, definitely something we should all take our time discussing to try to get it right from the very beginning.
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i think it would be good first to get all existing fees/commissions in one list to have an overview of what is already charged, where it goes and then decide what else is needed on top or any change to the existing charges should be done.
2 Likes
I agree it would provide better clarity. I think the upcoming PWG could take care on it once officially elected (to the extent they get the required quorum on-chain of course)
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I agree if we can find a way to generate more revenue to maintain the rewards level people would love that
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Let’s wait for the PWG to be elected on-chain and let them review all of the proposed solutions.
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Not a wise move IMO, you wont put all your eggs in a single basket.
It’s a consolidation of liquidity instead of stretching it thin across multiple trading platforms.
The one that maintains a sustainable revenue
Just throwing this out there, what if (along with the fee options already discussed above) we had the DAO purchase a WMT EarthNode and have Indy labs run it for an additional stream of revenue? We would be diversifying and supporting the growth of another great Cardano project looking to disrupt a massively profitable industry.
1 Like