We have voted in favor of the Snapshot proposal to activate 2, 3, and 4 bps fee-tiers on Base. That said, this is an area for greater research and discussion around the potential risks associated with this experiment, especially since the ETH/USDC Pool on Base represents one of the most strategic pairs on one of the most strategic L2s.
Considerations we think are worth exploring from the existing conversation:
- The fractionalization of WETH/USDC liquidity across multiple fee tiers, potentially leading to even more outstanding market share for the Aerodrome 4bps pool.
- Exploring deeper the characteristics of Aero pool trading volume (fewer trades, higher volume).
- An analysis of Aerodrome’s ability to react aggressively to a new fee tier and the second-order effects of a fee race.
- What is the optimal rate between 2, 3, and 4 if the DAO were to make a single decision?
We look forward to greater community research and discussion around the topic prior to an onchain vote. It’s an interesting idea and certainly worth exploring more.