[DIP-33] Network Fee Changes and Amendment to DIP-11 Mainnet Proposal

Abstract

[DIP-33] proposes changes to the calculation of the Network Fee update as outlined in DIP-11 to address issues caused by market volatility and fluctuating fees. It introduces a minimum 14-day notice for fee updates and a process for adjusting fees based on the 15% deviation threshold measured monthly.

Motivation

The current Network Fee structure, as outlined in DIP-11, requires stakers and clusters to pay fees that, depending on various factors, might be recalculated monthly, and if recalculated, updated by the DAO multi-sig committee. This process has proven less than ideal, given the volatility of market conditions and the potential for significant deviations in Network Fees. These fluctuations have resulted in liquidation events due to the limited time between fee forecasts and updates, the lack of certainty surrounding forecasted changes, and the imprecise nature of the estimations. The proposed solution aims to mitigate these issues by providing a minimum of 14 days' notice for all Network Fee updates, allowing stakers and clusters ample time to react and adjust their runway accordingly.

Changes to the Network Fees Calculation

The following passage will replace the final paragraph of the Network Fees Section under the subsection DAO controlled network parameters in [DIP-11], and become effective immediately after the passing of this proposal:

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The Network Fee deviation shall be measured with closing data from the 1st of each calendar month as soon as it becomes available (hereinafter referred to as “Deviation Check”). If the Network Fees’ proposed value were to change from the previous Deviation Check to the following Deviation Check by more than 15%, the Multi-Sig shall update the Network Fees Formula with the updated values of the APR and ETH/SSV variables. If the Deviation Check results in a need to update the Network Fee, such a transaction will be proposed on the second schedule batch as outlined in DAO Contributor: Proposal for Engagement as the DAO’s Master of Coin.