CIP #10 - Adjusting Fee Structure for v3 Pools

Abstract

This proposal suggests revising Cakepie’s fee structure for v3 pools to enhance fairness and sustain benefits for liquidity providers (LPs). Presently, Cakepie applies a 20% fee on LP rewards in v3 pools. The new model proposes a 40% fee, but exclusively on the boosted APR generated by Cakepie rather than the total LP rewards. This adjustment aims to address the disproportionate fees arising from narrow-range liquidity provisioning in v3 pools, ensuring a fairer approach and maintaining competitiveness in alignment with Cakepie’s long-term goals.

Motivation

As Cakepie evolves to support v3 pools, this fee adjustment ensures LPs are charged based on the additional value they gain through boosted APRs. By tying fees solely to the boosted APR generated through Cakepie, this change seeks to preserve user advantages while promoting sustainable participation. This revised fee structure aligns with Cakepie’s strategy to bolster user satisfaction, encourage long-term engagement, and maintain its competitive edge in the DeFi ecosystem.

Specification

Apply a 40% fee exclusively on the boosted APR generated by Cakepie for v3 pools, replacing the existing 20% fee on total LP rewards. Other pools, such as V2, stableswap, and position manager pools, remain unaffected.