PIP 25 - Streaming fees to DEFI Pies

Summary

This proposal suggests a concrete first step to the [RFC] Incentivizing DOUGH Holding, Staking & Revenues by introducing a streaming fee of 0.7% to DEFI+S and DEFI+L.

The scope of this proposal excludes how fees are going to be used, instead, it keeps it simple by proposing all the fees accumulates into the DAO Vault already deployed for this purpose 0xaf2fe0d4fe879066b2baa68d9e56cc375df22815.

Motivation

The introduction of fees it's a mandatory step to capture value from the Pies and funnel that to $DOUGH token holders. The proposed value of 0.7% is competitive compare to alternative indexes like DPI, it's within ranges of the traditional investment industry.

For reference, based on Morningstar's research, the average expense ratio for a small-cap fund is 1.61% instead the average large-cap fund has an expense ratio of 1.45%.

What are streaming fees? The streaming fees are paid out to the DAO linearly over time based on the entire market cap of the Pie (ie: 0.7% of market cap over 1 year). The streaming fee is calculated linearly and can be claimed by anyone, anytime by calling the appropriate function in the Pie smart contract.

The current implementation of PieSmartPools already includes all the necessary code to activate such fees, with no code change involved.

Which Pies are fees proposed for? At the time of writing, the proposal for fees is only related to DEFI+L and DEFI+S. The same fee structure can be applied to future DEFI Pies according to governance.

Why not DEFI++? By only introducing fees to the underlying of DEFI++ (DEFI+L / DEFI+S 70/30) there is no need to add additional fees to DEFI++ itself.

Closing notes

The sooner we enable the protocol to capture value, the stronger the incentives for DOUGH token holders to actively participate in the growth of the protocol.