The Team initially planned to wait for Spectra’s TVL to grow before deciding how the fees would be collected. However, after gathering feedback from the community, we found it feasible to activate fee collection immediately, and let the community decide on the distribution method.
Summary:
Activate Spectra Protocol’s fee collection to start distributing fees from the protocol to the DAO and APW lockers.
Context:
The Spectra Protocol has the capability to collect fees from underlying yields and bribes. By turning on the fee collection, we aim to activate the fee collection process
This will enable the protocol to begin accumulating the following fees: 3% of the underlying yield from tokenized assets and 10% from the bribes made to voters.
These fees will be directed to various actors within the Spectra Protocol, the distribution method will be voted on in an upcoming proposal.
Rationale:
Activating the fee distribution will further incentivize token lockers and align their interests closely with the Spectra Protocol. This alignment enhances the value proposition for participants who lock their tokens, fostering a stronger and more engaged community.
Proposal:
We propose to activate the fee collection within the Spectra Protocol. This will effectively levy 3% of the underlying yield from tokenized assets, and 10% from the bribes made to the voters. The exact method of distribution and the allocation proportions will be determined in future proposals, allowing for community input and consensus.
Voting options:
Yes, activate Spectra Protocol’s fee collection
No, Yes, do not activate Spectra Protocol’s fee collection
We are glad to finally see this proposal on the forum and support the proposal to activate protocol fees.
A 3% fee on the yield generated by IBT seems appropriate to start. A quick analysis conducted on our side shows that with the current TVL of the protocol, it would generate around $45k in revenues per year, enabling it to remain attractive in comparison with the competition. However, a gradual increase of fees (e.g. every 3 months) towards 10% within 12 months seems to us an option worth considering.
The 10% fee on bribes made to voters seems appropriate, in line with the fees charged by other veMODEL protocols. Due to the small number of bribes performed to voters in the past, we have not been able to carry out an analysis of the potential revenue generated for the protocol.
Thank you for your message and analysis. Fees can definitely be changed in the future. Nonetheless, I would refrain from settling already on the future increase (in this proposal), notably because a fee “too high” (and higher than the competition) could also significantly affect the attractiveness of the protocol for LPs. I would wait for more traction to offset the fee on yield through the revenues on volume.