Minting fees open discussion

Miscellaneous
#1

The current youves engines all have an initial minting fee of 1.56%. There are various reasons why that is:

  • minters receive YOU rewards for their activity and should in return support the protocol. The ROI (received YOU vs. fee) is less than 6 weeks.
  • from a security perspective we did not want to have a situation where a drain attack would be possible, that’s why by having a “spread” repeated calls wouldn’t be feasible.
  • we wanted to increase stickiness because now users had to always decide whether they want to burn (and then later on pay again the minting fee) or simply stay in the protocol.

I believe that many of the benefits in the minting fee have been proven, however the drawback is that short-term loans are disincentivized. It’s currently unfeasible to get a loan to get leverage for a day and pay it back the day after.

The question is “is that short-term behaviour something we want to support as a protocol or not?”

Let me know your thoughts.

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#2

Maybe we can have a try to reduce the minting fee to 0.5%，Let’s see what will happen. Dynamic adjustment to the market may be a good option.

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#3

An idea for minting fee, can we set the first month as new synthetic asset Marketing Activity Month. Free minting in this month to attract users and TVL quickly. If it works, maybe it can be applied to the promotion of all new assets.

#4
  • In this case there is a need to sell the accumulated YOU to compensate. So does the high annual interest rate. But honestly I haven’t researched whether this is related.
  • I’m not sure if this is a protection, can you please tell us more or send resources for self-study?
  • Great point :slight_smile: Great for the protocol, but not for the users.

As a result, I would also start experimenting and adapting to the market. With the current tezos farms, I think if given the opportunity for cheap loans, TVL could grow.
That didn’t work in the Kolibri protocol (where the annual rate is only 0.5%). But there are a lot more collateral options in Youves for minting! and it could work!

#5

Or maybe Youves can provide two choices to minters：one is the current mechanism, for the long-term minters; the other one is no minting fees and no YOU rewards, for the short-term minters.
As a minter, if loan for less than 6 weeks, should better choose the short-term option.

At the same time, we could set the first month as new synthetic asset Marketing Activity Month. Free minting in this month to attract users and TVL quickly. If it works, maybe it can be applied to the promotion of all new assets.

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#6

I propose the following short term:

  1. free minting fees for new engines for the first xx weeks.
  2. lower the minting fees (i.e. 0.5%) on existing popular engines and experiment if the additional minted amount is bigger than the given discount.

For the Mid-term:

  1. have engines with no-minting fees and no-you distribution?
  2. adapt minting fees on peg situation (similar to the interest rate response)
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#7

This discussion has led to the current Governance proposal YIP-014. Please vote until Monday, February 27, 2023 - 12:00 UTC.

Vote here: https://app.youves.com/governance#YIP014

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