After analyzing our current revenues, the overall crypto market conditions, and our competitors, discussions within the Pickle Team have led to the decision to experiment with different fee structures in order to remain competitive with the current landscape of L2s.
Tl;dr - We want to lower our fees on Metis from a 10% performance fee down to a 4.20% performance fee for an indefinite period of time. Depending on how this experimental fee model performs, we will reassess the rest of our fees against the current market conditions and our competitors.
Currently, Pickle Finance charges fees on a per-chain basis. For example, our fee on Ethereum mainnet and Polygon is a 20% performance fee while for newer chains such as Aurora and Metis, we charge a 10% performance fee.
Until now, we have been informally experimenting with different fee models to come to the best equilibrium possible regarding the fees we charge for the services that we provide. This forum post is meant to formalize our intention to enter a phase of fee experimentation to ascertain what path is best for Pickle Finance going forward.
So far, the team has discussed fee implementations gauged on factors such as how much gas we save our customers, the complexity of the strategies we deploy, and the quality of the overall user experience that we provide. While these discussions are still ongoing, the team has decided to begin down the path of testing out different ideas regarding our fees on a smaller scale to better understand what works and what doesn’t in the DeFi liquidity and investment management services niche that we occupy. We propose taking the first step of reducing our fees on the Metis chain from the current 10% performance fee down to a 4.20% performance fee for an indefinite period of experimentation.
This will give a chance for the Pickle team and community to collect more data, assess, and brainstorm how a lower fee structure plays out on a smaller scale before giving consideration to a more holistic revamping of our current fee paradigm.
The goal with this move is to increase our TVL sufficiently to make up for (and hopefully exceed) the revenue that we would forfeit by lowering our fees. As a business, it is important for us to continuously reexamine the overall price point that we charge for our services and whether the Pickle protocol and its community would be better served with different structures. Furthermore, as a result of recent events in the DeFi space, we are considering that TVL may be a more important metric for overall protocol success as opposed to profit margins, revenues being equal, when factors such as chain incentives and airdrops are brought into the equation. Just to give an idea, we have been considering whether we would be better served by lowering our fees in order to push for the Fantom chain incentives rather than maintaining larger profit-margins.
With this being said, we invite the Pickle community and of the broader DeFi community alike to give feedback on this direction for Pickle Finance. Thank you for your time and consideration
~ Pickle Team