Change the fee in the DAI pool from 1.5% to 1%

For this proposal to pass, it requires a 20% quorum and 66.7% supermajority.

TLDR

• This proposal seeks to decrease the pool fee on the DAI pool from 1.5% to 1%.
• The increase came as a continuation of the stablepool fee experiment [1].
• Performance of the DAI pool has lowered w.r.t. fees and volume, justifying the decrease as part of the stablepool fees experiment.
• The goal is to increase APYs not only for the DAI pool but also indirectly to other pools which might see more volume coming from swaps that involve DAI.

Abstract

The effect on pool fees has been thoroughly analysed in the past weeks by the DAO and our team of analysts. Changing the pool fee in the TRAC pool has been a success so far, with APRs increasing for all LPs in the pool. The TRAC experiment finished - resulting data can be found in the data analysis governance post [2], which showed that a 1-4% fee resulted in more fees accrued compared to 0.2% and 0.5%.

The stablepool fee experiment aimed to increase the pool fees of the USDC, USDT and DAI pools, and use the DAI pool as a control. When the experiment finished, the fees in the first two pools were increased based on data analysis, and the DAI pool fee was changed to further experiment with a stablepool fee. DAI pool’s weekly volume and fees since the end of August are shown in Figures 1 and 2. Average Daily Volume and Fees collected at different pool fees is showed - the graph doesn’t include market share above and below the swap fee changes and captures relatively long periods of time. The fee was set at 0.2% on the DAI pool during periods of higher volume/volatility. Therefore, although a good benchmark to analyse pool performance, average daily volume and fee at different swap fees shouldn’t be taken solely into consideration when deciding what fees to set the pools.

Figure 1 - Weekly DAI pool volume since the end of August 2021.

Figure 2 - Weekly DAI pool fees since the end of August 2021.

Figure 3 - Average Daily Volume and Fee at different pool fees. Data until the 3rd of February.

Conclusion

Data on volume and fees accrued in the pool justifies a decrease in the DAI pool fee, as collected fees have lowered since the change. The decrease in the pool fee will also have an effect on token swaps that involve DAI. This decrease is part of the stablepool experiment, and the pool performance will be continuously tracked - with further modifications proposed to the DAO when needed.

For

1. Increase the pool fee in the DAI pool from 1.5% to 1%.

Against

1. Keep the pool fee in the DAI pool at 1.5%.

[1] https://gov.bancor.network/t/proposal-change-stablepool-fees-usdt-usdc-dai-to-1-0-1-0-and-1-5-respectively/3357 [2] https://gov.bancor.network/t/trac-pool-fee-changes/3353