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.
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.
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?
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?
Fee sharing happens now where the GUI hoster gets a % of fees, ecoserum gets a % of fees and the rest goes to serum
I think the following fee structure for non-stable markets may be better considering the recent concerns of SRM and MSRM sharing. There will still be a benefit for holding SRM and MSRM while trading, but the fees tiers will be much closer together.
I also propose that stable market fees be reduced further too, to 1 bp taker + 0 maker, instead of the 2.5 I proposed initially.
I think this will happen, its just timing and details… keep your thoughts coming
Actually, I think the following fee structure for non-stable markets would be better since it’s more competitive. I’ll start an on-chain proposal for this thread in a few days and link to it when started.
Why remove maker incentive? I’m genuinely curious on the thoughts here.
A maker rebate requires an extra fee for the taker if Serum wants to keep some fee revenue for itself. For example if Serum wants a 3 bps fee on every trade for itself, and the maker rebate is 2 bps instead of 0 bps, the taker fee needs to be 5 bps (5 bps - 2 bps = 3 bps).
I think Serum should minimize fees to get as much activity as possible. Serum isn’t just an exchange, it’s a platform for other projects to compose with, so any fees have an extra negative impact. But I think Serum’s tokenomics require some sort of a non-trivial fee for buy back and burns since the SRM unlock schedule is very inflationary otherwise. All this considered, there doesn’t seem to be bps available for a maker incentive.
In your opinion the only incentive for MMs should be to capture the spread?