[Proposal] Introduce withdrawal fees for low yield native jars and wrapped yearn vaults

There have been some further developments on how to monetize the wrapped yearn vaults and low yield native jars. Unfortunately there won’t be any change in the fee sharing model from yearn so I want to open up this discussion again.

My last thread on this topic: [RFC] Introduce deposit and/or withdrawal fees for Yearn affiliate jars

As we don’t want to single out the yearn vaults we should in my opinion also include low yield native jars, I propose that for now we also include: p3CRV and stEthCrv, as both these farms are being overcompensated for the performance fees they generate for pickle.

It’s not immediately obvious which jars should fall into this category as for example pSADDLED4 is also a stablecoin farm but has an excellent (for the protocol) profit/pickle emissions ratio.

As BTC strats tend to have a low apy, were we to release a BTC jar in the future (with PICKLE emissions) this should in my opinion also be included in this proposal to include withdrawal fees.

I want to amend my proposal I did on my thread I linked above, we should treat these proposed jars and yearn vaults, in my opinion, equal.

I propose:

0.5% withdrawal fee for p3CRV, stEthCrv, and the wrapped yearn vaults (pYearnUSDCv2, pYearnLusdCRV, and pYearnFraxCRV).
Leave the rest of the jars as is.

We should strive for a sustainable fee model for all of the jars we have. Some of the jars work excellent with the 20% performance fee we have right now, but introducing new fee structures allows us to have a wide range of jars, while they aren’t detrimental to pickle.


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3 Likes

As we don’t want to single out the yearn vaults we should in my opinion also include low yield native jars, I propose that for now we also include: p3CRV and stEthCrv, as both these farms are being overcompensated for the performance fees they generate for pickle

We should use different metrics for assets like ETH, BTC and Defi “Bluechips”, these farms give us the possibility to get exposure to the underlying tokens. Also these assets are much more volatile and have potential price appreciations (ofc. they can also dump hard), but if you look at the continuing devaluation of FIAT currencies, you can expect these assets to gain value in the long term (in Fiat terms). As a protocol it absolutely makes sense to “trade” mintable tokens for ETH or BTC, because these assets can 10x in the future.

I would only include stable jars in this proposal.

Also we proposed several ideas to make these jars profitable (use Cream for leverage, use abracadabra, etc.)

1 Like

I agree we need to change fees for unprofitable Jars. Unprofitable Jars = Fees earned < pickle emissions. Any jar where we are printing more pickle than the jar earns we are subsidizing.

I think for new Jars we should let devs estimate which category the Jar would fall under and use that fee structure, and in about a month assess profitability and change the fees as needed.

At the same time, I don’t like adding withdrawal fees after the fact of people depositing their money. We could announce when the withdrawal fees will kick in and provide a grace period for free withdrawals.

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This discussion has been running for quite some time and it will probably take weeks if not longer from now before it is implemented (if this vote passes), but we could indeed include an additional grace period.

2 Likes

Wouldn’t it be more straightforward to do max(0.5% withdrawal fee, 20% performance fee) and apply it consistently?

2 Likes

I have to agree with Caishendao, all across the board max withdrawal fee of 0.5%. 1% ape tax if its within 7 days?

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I don’t think we should apply a withdrawal fee across the board because we have jars that aren’t problematic with the current fee structure, pointing out jars which are obviously detrimental and applying a fee to them which make sense (so the 0.5% withdrawal + 20% perf fee) is my preferred solution.

I think a flat 0.5% withdrawal fee is fair enough tbh, we benefit off of opportunistic TVL if they were to withdraw within a short timeframe

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Just to be clear, I’m not suggesting a withdrawal fee across the board. I’m suggesting max of a withdrawal fee or 20% performance fee. Basically if 20% over the period you’ve invested doesn’t equal the withdrawal fee, we take the difference when you withdrawal. So the greater of the two fees.

That way, were not targeting specific vaults, it’s not discretionary when yields rise and fall. It’s a single consistent approach across all the vaults.

See the discussion in DILLDAO, I will no longer push for withdrawal fees, so I won’t push this thread further. You can check my new proposal here: Better monetization of wrapped yearn vaults

1 Like

This proposal, as well as your new proposal are both great!