[PROPOSED] Serum Fee Reduction Proposal

Hi everyone, I’m proposing a reduction in Serum fees and an increase in GUI rebates.

This proposal will bring more trading activity to Serum and will incentivize more projects to build on top of Serum, rather than projects trying to circumvent the current high fees.

For regular Serum markets, I propose taker fees for each SRM tier to be reduced by half, and maker fees be reduced to 0 bps for all tiers.

For stable markets, taker fees should be reduced to 2.5 bps for all tiers, and maker fees be reduced to 0 bps for all tiers. This will make Serum much more competitive with non-Serum based stableswap projects, such as Saber and Orca’s stable pools. Serum markets should be updated to stable fees through a separate on-chain governance vote, with a process in place to update fees for new stable markets.

The fee rebate should be updated to 40% for GUIs. This will incentivize more projects to host Serum GUIs and will benefit users.

I suggest this proposal be submitted to governance after some forum discussion, and with some expected timeline of implementation if voted in.

New fee tiers for regular Serum markets:

Fee tiers for stable Serum markets:

For reference, these are Serum’s current fee tiers.

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I think the proposal makes a lot of sense. At these rates I would be prepared to spend significant dev effort to port/move to serum. I would imagine many other devs / dev groups would do the same.

I agree with this proposal. I think a big selling point for order books is the greater capital efficiency. And that doesn’t really mean much to users unless it reduces their trading fees. Specifically, the cost of a trade for a user (taker fee + slippage + blockchain fee) should be low enough that people will bear the mental cost of switching from a CEX or other dexes. I think this proposal basically nails it, and gives us a lot of ammunition when trying to bring people into Serum/Solana.

If it doesn’t work out, we can always raise the fees again with another governance proposal later.

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Seems like a way that we can more and more traders to serum! This would make serum competitive with fee schedules of most of the top CEX’s

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Awesome proposal. I’d recommend to still provide a maker incentive of 20-50% of the taker fee. It should cover the gas cost for most makers and allow them to keep the quotes tight.

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Agree with fee change, not so sure on GUI change. Together its a double whammy to how Srm controls inflation.

However overall feedback, changes like these without any burn of supply will enhance stress on the token and its price through inflation.

Appreciate that the Foundatiin/future owners of all the locked tokens dont want them burnt but, 10bn tokens is a meme that luckily the market has ignored up until now.

Your project has bypassed all Srm tiers for users, would you change that set up if the proposal passed?

I’m not affiliated with Mango, but projects bypassing the fee tiers by sharing SRM or MSRM with users is inevitable. If Mango doesn’t do it, someone else will. Programs could even allow other programs to flash loan a MSRM for a trade and just take a small fee above the MSRM discount.

I think fee tiers make sense for CEXs, where you can’t share data between user accounts to reduce fees. Long-term, fee tiers make less sense for decentralized, composable projects like Serum.

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If you disagree with the SRM fee tiers, then you should just propose to get rid of them. Doesn’t make sense for any protocol that has access to a MSRM to stop using it when the benefit is out there.

I mentioned that I disagree with fee tiers long-term, not necessarily short-term.

Right now, the Serum and Solana ecosystem is very early, so most new projects building on Serum won’t know or care that there might be a project offering MSRM flash loans to reduce fees. Serum can take advantage of this to make extra fees that would have been reduced by SRM or MSRM. Of course, this isn’t ecosystem friendly, but might be needed to keep up current SRM burns?

Long-term, to reduce fees, using MSRM flash loans/proxy programs will be the default for any program that trades on Serum. At that point, Serum fee tiers and any token based fees will just become a CPI compute tax for every program that trades on Serum.

I agree but nobody seems to consider the other side of this fee reduction, that the Serum foundation and its 10bn tokens has no meaningful utility left. So its up to the dao to pro actively consider how to keep this project thriving, growing and ultimately a long term success.

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Completely agree with Mjp. I have said this before and i will say it again, unless there is a strong token burn, the fact that there is a 10bn supply will keep retail from investing and put people off from investing into the srm token. Everyone i talk to is put off from investing cause of the total supply and if the fees are reduced further, how does the foundation going to create value for the token?

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Yes!! How can I tell others to invest when FDV is $80B? SRM burns with fees do nothing for FDV, so current fees or these new reduced fees are the same thing. Please, Lets resolve this tokenomics matter as it’s the largest issue for Serum and a laughing point when new investors look at it [Tokenomics] The elephant in the room - Serum's FDV - #17 by Defi_Degen

Mango will be letting other users trade on Serum using their MSRM. All fees are now going to be lowest tier. What is the utility of the SRM token now?? Draft: Mango Labs - Governance - Mango - Governance Forum

I think these new proposed fees are too low. Keeping 10bps on MSRM like it is currently but making other tier fees lower will let many users have lower fees but will also keep up SRM burns. Taking into account that projects with an MSRM will share it with their users. Without burns SRM is hyper-inflationary with upcoming token unlocks.

  • <100 SRM: 18bps
  • 100 SRM: 15bps
  • 1000 SRM: 14bps
  • 10000 SRM: 13bps
  • 100000 SRM: 12bps
  • 1m SRM: 11bps
  • 1 MSRM: 10 bps

I don’t think the proposed fees are too low at all. If you model the SRM burns, then the amount of volume Serum needs to do for the burns to actually matter needs to rival that of top CEXs. Binance has a base taker fee of 10bps, so fees from this proposal are competitive and will attract many big players to Serum.

Lower taker fees also has added benefit of getting the AMMs on top of Serum to route more of their trading volume to it. From @AlphaRay on Raydium’s trades:

Serum needs to be aggressive and do whatever it takes to become a top exchange in both CeFi and DeFi land. Being stingy on fees when Serum isn’t even a top 20 DEX is shortsighted and will hinder its growth.

I am in favour of a huge fee reduction, even further fee reduction for stables, stopping mango from bypassing utility and a burn to reduce token overhang.

It will take work and a step by step process,but lets make progress

How would stopping protocols like Mango from sharing their SRM or MSRM for trading work? It doesn’t seem possible with the current implementation

I think the first step is for Serum to ask nicely, then take it from there.

What about fee sharing? Is it possible for the serum program to share fee earnings with other parties?

I.e. % goes to the raydium treasury (if they have one)

Another use case could be AMM’s. Shouldn’t Atrix LP’s receive a % of the fees organically without needing farming rewards issues by one-off grants?