This proposal would delegate the setting of pair-specific taker fees on Osmosis to a subDAO.
As discussed in Proposal 530, particular pairings may require a specific taker fee to be set due to liquidity requirements, market demand, or other user experience concerns.
An initial user experience concern is that pools with a typically lower spread factor, such as Liquid Staked Tokens and their unstaked counterpart, pairs of stable tokens or Transmuter pools, will have their total swap fee increased significantly by implementing a global default taker fee.
The initial scope of the Protocol Fee subDAO will be to use the authorization granted by this proposal to adjust the taker fees on specific asset pairings to ensure that these are reasonable compared to the typical spread factors used in their pools.
This scope is currently set to deciding on a taker fee of the default set by governance, an alternative lower taker fee of 20% of the default, or zero.
When a methodology is identified for setting taker fees based on liquidity requirements, market demand, or further user experience concerns, governance will be re-approached to confirm acceptance.
Membership will be in the form of a subDAO founded on Osmosis’ deployment of DAODAO located at: osmo162wk8qc3w5s9hfs8dm76wrqnk6fjmsez2t4kk6zyugmrlzgds8sqfesmlm
As this subDAO will be able to adjust the taker fee on any pairings at will, this interfaced deployment enables transparency of action so that all changes can be rationalized and the Osmosis DAO can make an informed decision to revoke access if required.
The subDAO should need a majority vote to pass changes and require at least four independent members to approve of a vote at any time in the event of changes in membership.
A voting period of three days with re-voting will be designated so that changing the taker fee for a pairing may be agile while still being able to be vetoed by the main Osmosis DAO in the event of excessive changes to the fees being set. Newly listed assets will incur the higher default taker fee as liquidity builds until this is overwritten.
Founding members are:
- Everstake (Validator)
- Hathor Nodes (Validator)
- Leonoor’s Cryptoman (Validator)
- Orageux (Independent)
- PRO Delegators (Validator)
- Stakecito (Validator)
- White Marlin (Validator)
Target On-Chain Date: 19th September 2023