Summary:
This proposal aims to reduce the 2 ADA batching fee to 0. Removing batching fees within the Liqwid app could boost transaction volumes in markets and lead to new automated yield strategies emerging as well as creating more value for the Cardano treasury.
To fully implement this change and balance the increased cost the Liqwid Core Team will begin paying in batching costs we propose reducing the batching intervals for all markets (ADA, CNTs and all stablecoin markets) to 4 hours.
The core team also proposes the right to independently update the batching interval per market at our discretion based on the volume of transactions and interest accruals in a given market. This allows our Core Team to be more economically effective and save ADA otherwise spent on batching fees for markets with low interest accrual and/or transaction volume.
Reasoning:
The 2 ADA Batching Fee was initially implemented to help offset the infrastructure cost associated with operating the Liqwid Batching System. Labs has paid this infra cost until the Batching Fee was introduced. After receiving input from multiple users that the Batching Fee was their primary hindrance stopping them from using the Liqwid protocol more frequently the Liqwid Labs Core Team is proposing to remove the fee and continue paying for this infrastructure cost out of pocket.
Our hypothesis is that with a significantly more matured Liqwid protocol and ecosystem compared to when the Batching Fee initially started the protocol should see an accelerating baseline transaction volume. This increased transaction volume could result in more automated yield strategies that further increase the protocol’s transaction volumes and kickstart a positive feedback loop which also provides more value to the Cardano treasury.
Reducing Liqwid Batching Fee to 0 while also balancing the economics of increased ADA batching costs the Liqwid Core Team will begin paying we are proposing a reduction of the batching intervals for all markets down to 4 hours.
The core team also proposes the right to independently update the batching interval per market on at our discretion based on the volume of transactions and interest accruals in a given market. Granting the Liqwid Labs Core Team additional flexibility over batching interval frequencies allows us to operate as economically efficient as possible.
Actions:
- Reduce Liqwid Batching Fee to 0
- Reduce batching interval frequency for all markets to 4 hours
- Liqwid Core Team granted ability to update batching interval frequencies at own discretion
Technical Considerations
- Liqwid Labs Core Team is in the process of testing for all possible outcomes of batching interval frequency updates on a per market basis.
Conclusion:
Liqwid Labs Core Team supports this proposal to reduce Liqwid Batching Fees to 0, reduce batching interval frequency to 4 hours and grant the Core Team the ability to update batching interval frequencies to save ADA batching fees.
Do you support this proposal and its included updates?
- Yes
- No