Objective:

The main objective here is 4 fold: Reduce the round-trip cost of entering and exiting Crucible Encourage more people to take part in presales, thus staking tokens Maintain the incentive to remain staked Add liquidity to FRM/cFRM pairs to encourage volume and incentivize exit via swap vs unwrap

Goal

1. Encourage access to cFRM to access presales and related utilities provided by holding cFRM
2. Encourage volume and most importantly encourage exit by swap of cFRM to FRM instead of cFRM Unwrap. Why? Because Unwrapping cFRM will reintroduce locked FRM into circulating supply and add sell pressure to FRM, where as swapping of cFRM to FRM will keep FRM locked while neutralizing the sell impact by increasing price on cFRM to FRM swap and bringing it back to neutral with FRM to Any Token sell.
3. Accomplish point 2 by providing sufficient unsegregated liquidity on one primary network.
4. Give users an easy fee free way to move cFRM to this singular network

Description and Details:

Proposed Action(s):

With this proposal, we are proposing that Ferrum lowers the Crucible fees as follows:

• Minting: Remains the same at 0%
• Transfer fees: Originally, buy fees were 1%, transfer fees were 2%, and sell fees were 3%. We’d like to change these to 0.3% across the board.
• Staking fees: Originally staking fees were 2%. We are proposing that we make staking fees 0%.
• Unwrapping fees: Unwrapping fee remain the same at 4%
• Unstaking fees: Unstaking fee remains the same at 2%
• Add liquidity for FRM/cFRM pairs.

Simpler New Crucible Fees (Arbitrum):

Transfer and Swaps: 0.3% Mint and Stake: 0% Unstake: 2% Unwrap: 4%

The above fees are for Arbitrum cFRM, which is where we would plan to support Crucible liquidity going forward. Users must stake their cFRM in the cFRM Arbitrum pool to access GC (TDI) and Presale Benefits.

There will be sufficient liquidity 10MM FRM / ~10 MM cFRM added on Arbitrum to support Price Impact / Slippage with Fee in the range of 2.0633% for 200K swaps at the point of liquidity being added.

Migration Timeline and Period of No Fee Bridging

We hoped to do this without a migration deadline, but that will inevitably delay accurate aggregator info updates of supply, reserves, CS, and NCS on CMC and other market info aggregators. Additionally, an unlimited timeframe will also hold back the listing of market-based cross-chain swaps through MultiSwap for cFRM, which will need to be set as a bridgeable asset temporarily. This technical debt needs to be for a limited period, so we are proposing a 30-day migration without fees. Beyond this period, the fees will need to be raised to encourage users to migrate during the migration period.

On BSC to prepare for Migration we will be doing the following:

1. Remove cFRM / FRM pair liquidity
2. Increase Unwrap Fee to 10+% on BSC, to prevent unwraps on BSC
3. Set unstaking fee to 0
4. Enable bridging of cFRM from BSC to cFRM Arbitrum for 0 fees

Giving users a path to move cFRM BSC to cFRM Arbitrum without paying any fees during the migration period. (This is a one-way bridge). Users are encouraged to move during the migration period to enjoy no fee unstaking on BSC, and no fee bridge to Arbitrum.

Work Required:

Admin:

1. Removing BSC liquidity
2. Configuration of cFRM fee changes
3. Article to explain the changes
4. Add Arbitrum cFRM liquidity

Tech: Enabling and configuration of Bridge contracts to allow bridging of cFRM from BSC to Arbitrum.

Note: Ferrum will need to unwrap the bridge liquidity cFRM on BSC without unwrap fees to support sufficient supply numbers on BSC as the supply on BSC is already quite limited, and the token is not upgradeable to add more supply through migration from another network.

Benefits:

The most significant benefit here is that the round trip fee, which was originally up to 8%, is now reduced to as low as 2.3%. As it stands, if a user stakes (2%), unstakes (2%), and sells (3%), or unwraps (4%), the round trip costs are either 7 or 8%. With the new proposal, if a user stakes (0%), unstakes (2%) and sells (0.3%), the round trip costs are 2.3%.

By reducing the staking fee, we are encouraging more people to stake and take part in presales. This could ultimately have an impact on the demand for the token as well.

By reducing the transaction fee to 0.3% across the board it eliminates confusion and makes the DEX experience more fluid since, originally, folks would need to adjust the slippage manually to account for the larger transaction fees.

Potential Risks or Downsides:

Potential risks here could include a possible sell-off of FRM since the barriers to exiting have now been reduced. Other downsides include the fact that users will not generate rewards from those entering Crucible.

Resources Required:

This will require members of Ferrum’s development team to change the fees accordingly, and configure the bridge for fee free bridging during migration period. The finance team will need to provide bridge liquidity and add liquidity on SushiSwap.

Timeline:

Upon completion of the vote, the execution of this proposal will likely take between 1-2 weeks. Testing will need to be done on the fee side to make sure fees are acting according to the proposal before deploying to production. Migration period for fee-free bridging will be 30 days.

Voting Options:

Option 1: Yes, lower entry barriers by reducing the round trip fees for Crucible and add liquidity. Option 2: No, keep things the same.

Impact Analysis:

Theoretically this proposal should help reduce some of the barriers to entry that currently exist between potential new community members and Ferrum. It should allow for Ferrum to raise more money for incubated projects as a result. Furthermore, a more streamlined fee structure should help to eliminate some of the confusion that exists around Crucible currently. The consolidated liquidity will provide better Price Impact / Slippage with fee tolerance on DEXes for swaps up to 200K incurring about a 2.0633% impact.

Alignment with Ferrum Network's Mission and Values:

Ferrum follows a feedback-driven approach to optimize it's deployed products and services. This is an example of listening to user concerns and making adjustments to improve the product so it is accessible to more users.

Execution Plan:

If and when the proposal has been voted through the dev team will take immediate action to change the fee structure, test it and deploy it. Shortly thereafter the finance team will increase liquidity.