KIP-119: Fee Distribution Threshold Addendum

Summary

Amend KIP-114 and add a threshold requirement before a fee distribution cliff.

Abstract

Fees from Synthetix Perps V3 intended for KWENTA stakers are to be distributed after a $500k threshold is reached to decrease the gas cost burden on smaller stakers.

Motivation

On Optimism, fees are rising to levels that would make claiming fee distributions unprofitable for some stakers. To alleviate this, it's recommended to distribute fees after a threshold is reached, and ensure a majority of stakers can make profitable claims on fees.

Also as Perps V3 is in the early phase of scaling up, volume and subsequently fee revenue is expected to be lower than Perps V2. Until substantial volume is flowing through V3 it's only viable to do a distribution of fees after a threshold is reached.

The Dencun upgrade will bring support for EIP-4844 (blobs) and is expected to bring gas costs down on rollups like Optimism. However, for now and the distant future, it's important to make sure that fees are claimable by smaller stakers.

Specification

For more information, visit the: Kwenta State Log