Decreasing Stability fees in some non-stablecoin vaults

Proposal Type: Adjustment of stability fees

Proposer: Defrost Team

Proposal: This proposal is to vote on whether and how to adjust stability fees in some non-stablecoin vaults

Background:

Currently, the non-stablecoin vaults in the Defrost protocol attract little TVL. This is partly due to the high stability fees charged: from 3% to 5%, much higher than those of the stablecoin vaults.

Details:

To incentivize the non-stablecoin vault users, we propose the following adjustment for non-stablecoin vaults:

  1. Stay unchanged
  2. Change to 1%
  3. Change to 0.5%

My vote would be for 2, as the middle ground. If we need to further reduce, thats still on the table in the future. If we see no benefit, we can crank the fees back up.

2 Likes

even 1~2% also sounds reasonable to me

I vote for 3. The lower the better

Iā€™m not so sure that the cause of low usage of the non stable coin vaults are because of the stability fee.
I considered using the other vaults, but what turned me off were the liquidation fees. Plus it is still very clunky to use the vaults. Users need to go through way too many transactions. If we could make it more plug and play such that users can choose how much leverage they want to use, have an idea of the expected returns over time, and only have to approve 1 transaction it would see a lot more usage.
And I dare say that we could charge an even higher stability fee. Take a look at what these guys have built: https://francium.io/ and they charge 30% on the dollar!
My vote is to keep stability fees unchanged or raise them. Focus in providing a better user interface.
Maybe consider reducing liquidation penalties.