IIP-161: Reduce MNYe Fees

IIP: 161 Title: Reduce MNYe Fees Status: Proposed Author: @kindeagle Reviewer: @funkmasterflex @afromac

Date: 11/07/2022

Simple Summary This proposal presents the opportunity to INDEX holders to reduce the MNYe Redeem fee from 30bps to 0bps

Abstract The current fee structure of MNYe is as shown below:

Streaming Fee: 95bps Mint Fee: 0bps Redeem Fee: 30bps

After additional market research and collecting feedback from core customer categories, we would like to propose that each of these fees be reduced to…

Streaming Fee: 95bps Mint Fee: 0bps Redeem Fee: 0bps

Reducing these fees will lead to a better user experience whereby users don’t forgo weeks/months of accrued yield when redeeming the MNYe position.

Motivation Market research has indicated one of the largest barriers to purchasing our products at size is the redeem fees. This proposal removes the redeem fee and will enable the product to more accurately track the Net Asset Value (NAV) as arbitrage traders do not need to allow for the redeem fee upon interacting with the exchange issuance module.

After further market validation, we believe that reducing the redeem fee will have a positive impact on N$F from large buyers and protocol integrations. Large buyers, whether whales, hedge funds, DAOs, or asset managers have shown pushback on the mint/redeem fees and the effect of the fee on product yield.

Specification MNYe fees will be amended to reflect the below. This change will be implemented by @edwardk’s team shortly after the proposal passes a community snapshot vote.

Streaming Fee: 95bps Mint Fee: 0bps Redeem Fee: 0bps

Voting FOR: Eliminate 30 basis points Redeem Fee for MYNe in accordance with the specification.

AGAINST: Make no change to MNYe fee structure.

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