PIP 25 - Streaming fees to DEFI Pies

PIP 25 - Streaming fees to DEFI Pies

Summary

This proposal suggests a concrete first step to the [RFC] Incentivizing DOUGH Holding, Staking & Revenues by introducing a streaming fee of 0.7% to DEFI+S and DEFI+L.

The scope of this proposal excludes how fees are going to be used, instead, it keeps it simple by proposing all the fees accumulates into the DAO Vault already deployed for this purpose 0xaf2fe0d4fe879066b2baa68d9e56cc375df22815.

Motivation

The introduction of fees it’s a mandatory step to capture value from the Pies and funnel that to $DOUGH token holders. The proposed value of 0.7% is competitive compare to alternative indexes like DPI, it’s within ranges of the traditional investment industry.

For reference, based on Morningstar’s research, the average expense ratio for a small-cap fund is 1.61% instead the average large-cap fund has an expense ratio of 1.45%.

What are streaming fees?
The streaming fees are paid out to the DAO linearly over time based on the entire market cap of the Pie (ie: 0.7% of market cap over 1 year). The streaming fee is calculated linearly and can be claimed by anyone, anytime by calling the appropriate function in the Pie smart contract.

The current implementation of PieSmartPools already includes all the necessary code to activate such fees, with no code change involved.

Which Pies are fees proposed for?
At the time of writing, the proposal for fees is only related to DEFI+L and DEFI+S. The same fee structure can be applied to future DEFI Pies according to governance.

Why not DEFI++?
By only introducing fees to the underlying of DEFI++ (DEFI+L / DEFI+S 70/30) there is no need to add additional fees to DEFI++ itself.

Closing notes

The sooner we enable the protocol to capture value, the stronger the incentives for DOUGH token holders to actively participate in the growth of the protocol.

9 Likes

I support this as a good first step.

0.7 is a competitive rate and I don’t think it will deter investors.

Keeping the proposal to just this issue is a good way to make progress now, while our community figures out the bigger picture.

I’d like to see discussion around how these fees will be used.

As the proposal points out however, the most important thing is to get this going as soon as we can. So +1 from me.

Definitely agree on the need to start capturing value from Pies, to eventually trigger a healty cicle of value toward Dough holders.

The application of competitive streaming fees seem like the best option. Looking forward

Sounds good. 0.7 seems to be a good starting point.

I proposed reducing the aggregate fee to .60%, so the updated proposal to .70% as a streaming fee is acceptable. You have my solid YES vote to move forward as this is a nice step to improve the health and long term viability of the PieDAO community. My only follow up ask would be to move forward with the next phase of your proposal ASAP after the fee phase is implemented. Clarity of revenue allocation is important. Great work.

1 Like

How long will this proposal be out there? When would be an anticipated implementation?

1 Like

Sounds good to me as a first step. We then need to figure out how to use this money to benefit DOUGH holders.

2 Likes

Definitely, I will make a simplified version of my RFC shortly.

I opened a vote on Snapshot. Enjoy gas-less voting!

4 Likes

This is a great idea. Even though revenue is minimal now but at least it incentives holders to hodl given how big PieDAO can become in the future.

3 Likes

Update

:white_check_mark: Vote passed
:white_check_mark: Streaming fees implemented for DEFI+S and DEFI+L.

3 Likes