1. Do you agree Uniswap does not need to offer substantial fee rebates to liquidity providers?
We believe LPs need to be compensated with fee rebates, it’s not an uncommon practice in centralised exchanges as well. Market making entities and trading firms that are able to reach high volumes usually maintain negative maker fees.
At the same time, we believe that there is space for fees to be distributed to the DAO considering the importance of revenue generation.
2. Do you agree a one-fifth fee tier is the appropriate starting point for a protocol fee?
We believe that a 1/5 fee tier could be aggressive for LPs . With that said, we acknowledge that it provides be a good balance between DAO treasury & LP rebates, so we encourage the community to consider a conservative or progressive approach where fees start from 1/10 and run test periods for each tier until 1/5 to observe differences and potential behavioural changes from LPs.
1/5 fee switch could potentially squeeze less “sophisticated LPs” but overall we are not worried about diminishing liquidity. It is of course something that needs to be monitored by the DAO.
4. Do you agree implementing the system on Polygon is a good first step?
Yes the risks there are considerably low and we believe it is a good first step.
5. What token do you think the DAO should trade fee income for to be held in the protocol treasury?
We believe a split between stablecoins and ETH should be reasonable. We would lean towards a 60/70% stables and the rest ETH approach. Markets can be volatile and so treasury management can break or make protocols.