Regarding the staking pool fee of 0,2%, this is really too low.
After reading the article posted above, the tendency is to put it at 10%. Although you would miss retail trades and get less volume, it’s still highly lucrative according to the article and we won’t really need to compete with other pools since there’s only 1 pool which can be staked.
But the idea is to reward LP stakers extra for the liquidity they provide and some additional risk they take. A 10% fee will not help liquidity much, price discovery will have a latency of 10% in respect to the market price.
Also the BAL rewards drop significantly with fees > 1%.
Therefore I like to propose a swap fee of 1% for the LP stakers pool.
About the other 2 pools, the original idea was a stablecoin pool and the ERC20 pool.
Stablecoin pools should be weighed the same, because they all should be worth 1 usd and have low risk of collapsing (except usdt…). Their fee should be competitive with similar pools otherwise they won’t be used. Low risk, low fees, propose: 0,05%. You’ll be farming mostly BAL rewards with the high volume.
The ERC20 have each very different risk levels associated with them. You might consider putting USDT in here as well, to have a stable asset in your volatile pool for increased liquidity and optionally out of the stablecoin pool. Swap fee would be much higher, I propose the maximum possible, which is 10%, I’ll explain now why.
For their weights, there’s something important to realise:
Every time the
feeSweep() function is called, it’s sweeping the fees into one of two Balancer pools. This also means that all the ERC20 fees are market sold off if they are creating a surplus in the balancer pool. This can happen a lot and we won’t have any control over it. It’s the traders/borrowers who will decide which ERC20 fees we get.
Arbitrage can come in and run away with the profits. When we put the fee at 10%, at least we will have some compensation for that loss.
Another reason for the high fee is the following.
feeSweep() function is permissionless and people will want to do that before collecting their fees. When people want to collect their fees and only choose one asset, again it’ll market sell the rest and backrunning bots will run away with the profits. A high fee will prevent people to withdraw only certain assets, and stimulate them to withdraw all assets, because then it’ll be without fee.
It’s a nice option to collect the fees in your favourite coin, but the rest will be left behind with less desirable coins. Therefore the 10% swap fee as compensation. It’ll still be cheap for them, because otherwise they’ll have to do minimum 8 trades to get everything in their favourite coin.
About putting BAL into the pools for the higher BAL emissions, I couldn’t find any info on that, but I’m open for it if it’ll be worth it.