SIP-2: Turn on pool admin fees

Summary

Turn on Saddle pool admin fees (vote in poll below for what % admin fee)

Motivation

LPs have been receiving 100% of swap fees during initial liquidity bootstrapping. Now that SDL token is live and pools are incentivized, there’s no longer a need to give 100% of trading fees to LPs.

An admin fee would also help to build protocol treasury.

Specification

  • Admin fee would go to protocol treasury

  • Putting out a poll to figure out what is the appropriate fee: 50%, 33.3%, or 16.7% (vote below)

  • E.g. 50% admin fee = 2 BPS (i.e. trading fees are 4 BPS; 50% = 2 BPS)

  • With the exception of the Arbitrum Frax Pool, which will have no admin fees. SIP-1 (ref) specifically requested 0 admin fees

Rationale

  • 50% admin free seems fair since LPs are getting SDL or partner incentives from staking. Also fee volume on is minimal compared to reward volume based on current trading volume.

  • For 16.7% admin fee, PhiMarHal had pointed out that Uniswap “standard” is 1/6ish, so that’s a solid example to follow.

  • The Arbitrum Frax Pool exception to admin fees is because we want to keep consistent with what was proposed/passed in SIP-1

Should Saddle turn on admin fees for most pools?
  • 50% admin fee
  • 33.3% admin fee
  • 16.7% admin fee
  • Against (no change; keep admin fee at 0)

0 voters

1 Like

Voted 50%. I think we have an opportunity to experiment here, given that trading fees are fairly low relative to farming rewards.

1 Like