Summary

Currently Mint fee goes up with veTHE deposited, which isnt useful. Reduce it to capture more TVL.

Original Proposal (From eTHENA channel in Discord)

After a lot of thought, we have come to the conclusion that minting fees should not be too high.

At the moment, mint fee is defined as 2x Dominance, upto 13.37%, which means if we have 1% of total veTHE supply, mint fees is 2x 1% = 2%. right now we have 3% of veTHE, and mint fee is 2x 3% = 6%.

Abacus is about to airdrop 26% of veTHE supply back to liveTHE holders very soon. The main issues we see here are

If our mint fee is too high, other alternatives might sieze the opportunity to capture it

Upcoming Lending/Borrowing Protocol - To make it more attractive, veTHE holders should be able to trade in and out of veTHE<>stakeTHENA for as low spread as possible.As the mint fee climbs to 13.37%, we might find less and less people willing to deposit veTHE into eTHENA, especially given the current state of liquidity & discounts.Making our upcoming, new Trading App for trading veNFTs (BNB -> veTHE || veTHE -> BNB) more attractive.

It is important we start viewing this as a veTHE/stakeTHENA pair on a hybrid DEX (venft <-> erc4626), only then we can see the need to reduce the fees to attract much higher trading volume on this pair. The goal of this fees was to generate additional veTHE for eTHENA holders. This has worked beautifully so far, with it generating an APY of roughly 40% just from this mint & redeem fees. Most of that fees was generated from Redeems, as minting had a tiny fees of about 2% only, until recently. So its in our best interest to keep the entry fees low, and target exitoors instead. The Abacus airdrop is a golden chance to push up our TVL numbers ($2m at the moment)

Secondly, the Self-repaying feature of our veTHE borrowing would only be legible if the full repayment period is not very long. For comparision, our great friends at 40acres on veAERO have 30% LTV, and 15% repayment APRs (after 25% protocol fees, the shown 12ep moving avg voting aprs of 20% of top 10 best voters would be 15% effective repayments), which is about 2 years for a 30% LTV loan to be repaid in full from its own yield.

For veTHE, at current levels, we predict that a 20% LTV loan can be paid back within 7-8 months only. This is a great advantage. But now with the eTHENA mint fees, for eTHENA users to participate in this syste, they would face an additional cost from the mint/redeem fees (~20% fees at the moment, upto 26.74% max), effectively increasing the amount that needs to be earned to repay the loan to upto 46% in terms of outstanding ltv.. in this example, it would take nearly 15-18 months to repay this new loan after including fees

So what can we do to addresses these issues?

one main problem with removing mint fees is that the people who joined till now would feel bad, knowing they paid upto 6% fees while new people dont pay any.

other option is to freeze the fees at the current levels, or at a round number say like 5%. it doesnt address the issue, but makes it a bit better than before.last option is that we start a fees refund program to our best capacity and lower it back as much as possiblethe bad option (the first one) solves the issue at hand, but leaves a bad taste with our loyal users, so not really preferable, unless everyone is okay with it/with the vision, that is - if we manage to increase activity 1.5x, then a decrease in fees by 1/3x (from current 20 to 13) would be net neutral!

we would love to know all your thoughts about this, @eTHENA

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Voting

Who can vote

eTHENA holders eTHENA stakers stakeTHENA holders PT_stakeTHENA holders LP_PT_stakeTHENA ftm.guru Eliteness holders

Options

1. Zero Fees
2. 1.337%
3. Freeze at current 6%
4. No change