OIP #4 - Introduction of Transaction Fees on Front-end Market Orders to Support Protocol Growth

Summary This proposal introduces a transaction fee on Market Orders executed through the Odos front-end to generate consistent revenue for the DAO Treasury. The goal is to support the long-term sustainability and growth of the Odos protocol, reduce reliance on unpredictable positive slippage revenue, and align incentives through the Odos Loyalty Program.

Motivation Currently, the Odos protocol does not charge a standard transaction fee on Market (Advanced) Orders, instead relying primarily on positive slippage as a revenue source. However, this model:

• Is statistically unpredictable and difficult to scale
• Does not provide stable funding to grow DAO initiatives or improve protocol infrastructure

To address these limitations, the DAO proposes to introduce transparent, minimal fees that can serve as a reliable revenue stream for the DAO Treasury while ensuring continued best execution for users.

Frontend Fee Structure

• Volatile Asset Market Orders:

A 0.15% (15 bps) transaction fee will be applied on swaps between volatile assets

-Stable Asset Market Orders:

A 0.03% (3 bps) transaction fee will be applied on swaps between stablecoins or stable pairs

Note: Limit Orders and Protected (Simple) Swaps will not be affected by this proposal

Loyalty Program Rebate Eligibility

• All fees collected from Market Orders will be eligible for rebates through the Odos Loyalty Program (with the docs being updated to reflect this)
• Rebate tiers will be based on user activity and token ownership per Loyalty tiers
• This mechanism ensures that power users and loyal contributors are rewarded and incentivized to keep trading through Odos

Revenue Allocation

• Collected fees will be directed to the Odos DAO Treasury.
• Funds may be used for: Protocol development Liquidity incentives Partner integrations Marketing Buyback and other rewards (via future DAO proposals)

Benefits

• Establishes a predictable, scalable revenue stream for the DAO
• Reduces dependence on positive slippage, which varies with market conditions
• Enables the DAO to fund meaningful initiatives without excessive token emissions
• Creates a clear alignment loop between users and the protocol

Next Steps

• Upon passing this proposal, the development team will implement the fee mechanism in the front-end routing logic.
• The Odos Loyalty Program and related documents will be updated to reflect fee rebate eligibility and rebate tiers.