Add protocol fees

Summary

Hashflow is currently positioned as one of the top DEX protocols; arguably the top DEX with zero slippage. Hashflow’s token (HFT) has been traded on markets for almost a year now. However, HFT holders and HFT stakers receive almost no benefit from the growth of the platform. This proposal is to suggest that Hashflow begin charging trading fees and allow existing and new HFT holders and stakers to receive some of those fees.

Overview

Since the launch of HFT in Nov 2022, trading volume has been increasing as Hashflow grows and integrates with other protocols. Many of these protocols (such as 1inch, etc.) charge fees on trades that are routed through Hashflow, however Hashflow itself does not charge fees.

It is important to offer utility for the token beyond governance voting ability. Activating fees on Hashflow and sharing this revenue with token holders will create more utility and attract more and more users to buy, hold and stake the token. Revenue from fees can also be used to buy back and burn HFT tokens, further increasing demand for HFT and benefiting all token holders.

Similar protocols (such as GMX, etc.) already charge fees and share them with token holders and they are able to benefit their community. Hashflow needs to do the same.

Adding fees will also have the effect of lowering trade volume but it is something that needs to be done. Victor and the team can find ways to experiment with different fee structures until there is a balance but that process must begin now.

Technical Specification

• Similar to how others charge fees on Hashflow integration, Hashflow will determine a fee to charge for each trade
• Victor and team can build a way to assess what fees can be charged
• Fees will be trackable on-chain
• Fees will be shared between the token holders and the foundation For Hashflow blue-chip pairs, we test a dynamic fee, where the fee charged on a given trade would be a function of our market maker’s quote on that pair. If the quote is highly competitive, then there would be a larger fee opportunity than if it was less competitive. For non blue-chip pairs, we start by testing out a static fee and refining it over time to ensure that the quotes remain competitive. The goal is to charge the maximum fee possible without making the quote uncompetitive
• Hashflow team continue to iterate until the right balance between fees and competitiveness is reached

Fee Distribution

The fees will be distributed according to the following:

• 30% - HFT token buy back
• 50% - HFT token holders who stake their tokens (pro-rata)
• 20% - Hashflow foundation

Benefits (Pros):

• Rewards for long term holders and stakers
• Increased demand / utility for HFT

Downside (Cons):

• Less competitive prices can lead to less volume sometimes