Goal: The Protocol Work Group(PWG) is in the fee manager for the trading pools ada/iusd , iusd/ibtc, and iusd/ieth on SundaeSwap and we are proposing to increase the trading fees for only iasset/iasset pools to 1%.
This proposal is pretty simple and straightforward. Due to low volume across the cardano ecosystem, liquidity provider fees are not as competitive as they should be and liquidity providers are suffering impermanent losses from it. In order to offset such losses, increasing liquidity fees slightly, bolsters the attractiveness and returns iasset liquidity providers on SundaeSwap without detracting to much from traders.
Added context: Minswap released some research a few months ago about liquidity provider fees and trying to find the “sweet spot” for LP fees. Setting fees to high detracts from traders while low fees makes providing liquidity unattractive. LP fees Part 1 LP fees Part 2
Unfortunately, we can not adjust the fees on Minswap to match the proposed changes for Sundae as Minswap has a different system being built to adjust LP fees.
I would also like to add that SundaeSwap has a current temp check by user Eldermillenial(co-founder of SteelSwap and heavily involved in MinSwap) were Steelswap would do research on 10 community chosen trading pools on Sundae to find the optimal liquidity fee for trading pairs. Steelswap fee managing program
We could potentially wait to see how this plays out instead of blinding setting fees at 1% if one of our proposed trading pairs was selected by the Sundae community to be researched by the SteelSwap team.
Im still working on this Gera. There’s some things I’m still trying to sort out. I’ll explain more over there when I nail down some details. I sent you a DM in discord a while back about it. But stay tuned on that front.
This is just for the iAsset/iAsset pairs on Sundae.