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KogeCoinKogeCoinby0x435C79B0d723fEFa03AaFd9410674F83D8025E490x435C…5E49

Should vault performance fees increase to add value to KogeCoin?

Voting ended over 4 years agoSucceeded

Koge provides an incredible value and service to its customers, with the main value propositions being it has the lowest fees (0% withdraw/deposit, 1% performance on non-native vaults, 0% on Koge vaults), is incredibly safe, has an easy to use UI, great devs (with 2 fully public with their identities), a great community with truly functional DAO, and multi-chain expansion.

That said, our competitors have much higher fees and yet command a higher TVL and market share. Much of their ability to command that TVL is that they can collect far more money (through deposit/withdrawal and performance fees that are much higher than ours) and use it for marketing, development and other methods to increase demand of their service and also their native token.

I believe that customers using autocompounding services are relatively price insensitive to performance fees, since they do not "see" these fees, unlike deposit and withdrawal fees which they are quite sensitive to (quick primer on price sensitivity - https://www.investopedia.com/terms/p/price-sensitivity.asp). Thus it is unlikely that raising performance fees slightly would impact customer TVL. I also estimate that "safety" is far more important to customers with large accounts than performance fees, and it is these customers with large accounts that we need to have this project succeed.

Raising the performance fees would increase value to Kogecoin holders by allowing the team to A) burn more Kogecoin from the open market until distributions end and B) increase dividends and burns when distributions end. Currently, all performance fees are used to burn Kogecoins, and dividends will start in May 2022. Improving both of these things will provide further support to Kogefarm's native token, Kogecoin. Supporting the price of Kogecoin is an important method of drawing in TVL, as it builds a community following and momentum when the native token is strong.

Thus, I have the following proposals for performance fee structures; if one of them passes, we will have a second poll to determine the timing of when this will occur. As a reminder, "Non-native" are all vaults that do not contain Kogecoin in them; Koge vaults are any that have Koge in them, including the single stake.

Proposals:

  1. Do not change anything.
  2. Increase non-native performance fees from 1% to 2%; leave native (Koge) vaults 0%.
  3. Increase non-native performance fees from 1% to 2%; add a 1% performance fee to Koge vaults. For the single-stake Koge vault, it would mean that the 1% fee was instantly taken out of circulation rather than bought off the open market, which would support the price indirectly by reducing coin supply.

Off-Chain Vote

Do not change performance fees
716.78K 60.8%
Non-native 2%; Koge vaults 0%
460.15K 39%
Non-native 2%; Koge vaults 1%
2.67K 0.2%
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Timeline

Oct 12, 2021Proposal created
Oct 13, 2021Proposal vote started
Oct 19, 2021Proposal vote ended
Oct 26, 2023Proposal updated