LIP-003: Protocol Fee Revision

Summary Core contributors to Liquis are proposing an update to the existing fee structure in order to achieve a more sustainable inflow to the protocol treasury.

The updated fee structure would be as follows: liqLIT: 14% vlLIQ: 5% Treasury: 5% earmarkReward Caller: 1%

Motivation Liquis has received no outside funding to date. Its contributors deployed it and have maintained it effectively as volunteers since June 2023. In order to ensure that there are enough treasury funds to pay contributors going forward without interruption without the need for further fundraising, Liquis will need to revisit its current fee structure.

The current Liquis fee structure is as follows: liqLIT: 19.5% vlLIQ: 3% Treasury: 2% earmarkReward Caller: 0.5%

The above figures are a breakdown of the 25% fee taken on Bunni / Balancer emissions earned by Liquis-staked TVL.

The goals of this change are a) to increase protocol funds available for budget, b) to increase the yield passed on to vlLIQ holders, and c) to increase the frequency at which earmarkRewards is called for Liquis pools.

It is expected that the treasury would be receiving $1,400 in fees per month at current prices and TVL. This would go to ongoing monthly upkeep (e.g. DDoS Protection, RPC, Hosting) and ETH gas expenses. Any excess cash flow would go to the acquisition of protocol owned liquidity.

Proposal Reduce liqLIT staking’s take of protocol fees from 19.5% to 14% Increase vlLIQ’s take of protocol fees from 3% to 5% Increase Treasury’s take of protocol fees from 2% to 5% Increase earmarkReward Caller’s take of protocol fees from 0.5% to 1%

References Docs: https://docs.liquis.app/the-protocol/fees