I’d like to propose a change to the Deposit/Withdrawal Fee schedule on Viperswap. I will list several potential options - these are by no means exhaustive, but will be representative of the various possible approaches (and I may miss some so feel free to contribute other approaches//tweak numbers).
I start with a simple premise: DeFi users don’t like high fees. High gas fees have caused BSC DeFi to explode in volume compared to ETH DeFi. ONE DeFi gas is much cheaper than BSC, but BSC is cheap enough (especially after they recently halved the gas fees) that the options (and for diversification of risk) makes sense to still also use BSC.
For reference, currently the Viperswap fee schedule looks like this:
0.75% deposit fee when adding liquidity to any pool
.5% after 5 days but under 2 weeks.
.25% between 2 weeks and 4 weeks.
.1% after 4 weeks.
Extra penalties will apply for the following conditions:
1% fee if a user withdraws under 5 days
2% fee if a user withdraws under 3 days.
4% fee if a user withdraws under 24 hours.
8% fee if a user withdraws under 1 hour.
25% slashing fee if a user withdraws during the same block (in order to disincentivize the use of flash loans).
These fees are based on your first deposit or most recent withdrawal. There is a notification telling you what fee bracket you fall in when you attempt to withdraw.
I was new to DeFi when I started on Viperswap, so I wasn’t really aware, having not been a part of DeFi summer. But now after some time, I’ve been able to explore other options on ONE chain, and also on BSC (for me - beefy, pcs, and bunny). Comparatively speaking, as far as I can tell, none of the other DEXes I am using currently have any deposit fee. As for withdrawal fees, beefy has one that is between .05-.1%; and bunny had a fee (but I think this makes more sense as they offer auto compounding pools). Bunny’s fee used to be 0.5% if withdrawn within 72 hours, though recently as far as I can tell, all the pools show No Withdrawal Fee. Not sure if it’s temporary or if they implemented a change that I didn’t notice. The overall withdrawal fees for VIPER and the length of the schedule are far too prohibitive in my opinion.
To be honest, I think a fee structure change to coincide with the start of DeFi week probably would have made more sense, but anyway, no reason not to implement an improvement even if the timing isn’t optimal. From a UX perspective, in order for me to get into new pools launched on DeFi week, I had to look at the whole launch schedule and ask myself which pool I wanted to be in the most (for me it was Cake but I also added a bit of DSLA and WISE), then just wait until it was launched. Otherwise, for me to go into new pools would be extremely cost-prohibitive (compared to other available dexes). My other option would be to add significant new total capital every time I wanted to participate in a pool, but sometimes that just isn’t feasible for a user.
We are about to go from 16x emissions to 8x for a while, and continually decreasing until the next time it gets to 16x sometime in Q1 2022. I think this is a big consideration for lowering fees soon.
With that in mind, here are a few general proposals:
- Reduce deposit fee to .5% or less
- Shorten extra penalties schedule to 3 days (with 1% being the 3day end period)
- Shorten regular fee structure to 2 weeks or 3 weeks total
- Remove deposit fee
- Shorten extra penalties schedule AND reduce penalties (ex. .5% begin the 3day end period)
- Shorten regular fee structure without changing numbers
- Remove deposit fee
- Shorten extra penalties schedule AND reduce penalties (ex. .5% being the 3day end period)
- Shorten regular fee structure AND reduce fees taken (ex. 0% after 2weeks, .1% after 1weeks, .25% between 3days and 1wk)
I think the slashing fee for flash loans can stay; but the 8% fee for under 1hr should go away completely.
Any combination of the above or tweaks to the number of days or % is possible. I just think some kind of reduction to bring it in line with other DeFi offerings is important.
Please chime in.