Update PUNK vault fees inline with new default fees Proposals

Authors

• Javery
• ChopChop

Glossary

• DAO
• Fee Structure

Summary

This proposal is intended to switch up the current 0/1/3/1/3 fee structure for the PUNK vault to 5/2/3/2/3

The result we’re aiming for is creating higher organic APRs for both liquidity and inventory providers. This preceeds the recent proposal to change all vaults.

Rationale

Since rolling out the second version of NFTX Protocol, we’ve recommended setting fees for new vaults at a 10/5/10/5/10 rate with the idea to optimize fees generated for liquidity & inventory providers. Since then, we noticed that these fees are too high, especially for vaults that have a high value like PUNK. This caused the vault to become less active and fee distribution drop.

To encourage more NFTs into the PUNK vault the mint fee was removed and the other fee’s on the vault lowered significantly from the default. Crypto Punks holders now have the opportunity to inventory stake with 0% fee and receive a full token back after 7 days lockup, it makes sense to change the fees to the new proposed standard of 5/2/3/2/3.

The NFTX DAO holds the most significant portion of PUNK liquidity which is also going to be staked on the vault to earn the DAO fees as well, so the updating of the fees to the new recommended standard will ensure existing LPs are still earning yield on their positions.

Effect

Opportunity

Increasing the fees for the PUNK vault will improve the fee distribution for existing inventory and liquidity providers, and bring it inline with the new recommended standards.

Risk

• The additional mint fee will lower the sell price by 3% and potential lower the NFTX inventory in aggregators such as Genie and Gem.
• The fees are fixed for a 30 days after changes.
• As the use of aggregators is relatively new, we generally lack data to back up these recommendations. Changing fees can mostly be seen as an experiment until further vault usage data caused by integrations is available to us.

Specifications

If this proposal passes, we will switch the current PUNK vault fees to:

• 5/2/3/2/3% (Mints, Random Redeems, Targeted Redeems, Random Swaps, Targeted Swaps).

Funding request - No

This request requires no funding.

Communication

• Discord: NFTX
• Forums

Quorum (for Snapshot)

• Minimum Quorum: More than 10% of circulating, non-treasury NFTX must participate for a proposal to Pass.
• Passing Threshold: More than 50% of voting tokens must vote FOR for the XIP to Pass. For changes to the NFTX contract, more than 70% of voting tokens must vote FOR for the NIP to pass.