I support proposal but 15 % looks high
I feel 5% percent would be great
I agree with taking fees since its not sustaible but hard to agree with 15%.
imo it should start with small numbers.
Where does the number “15%” comes from ?
How much does team estimate the LP army treasury will earn in a month or a week with that high fee and is that necessary ?
I think there should be a deeper analysis with stats.
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Every project needs to be profitable. So it is reasonable to charge some fees.
Just wonder if the proposed fees brings to parity with other projects. One friend here said Orca charges 12% and not 15%
Economic incentives matters. And on DeFi I think they matter more than marketing.
So I would also reconsider spending the protocol revenue with marketing and working groups. I don’t see why someone would provide liquidity to a dex because of those.
Better just reinvest the revenue in protocol development: tech, UI, reducing costs (like for the purchase of bin arrays in the dlmm), etc
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I’ve been a user and advocate of Meteora to my community for the longest time that I can remember [q4 last year]. DLMMs are great because the tech is great for us traders/market makers, gives you a lot of flexibility when it comes to strats.
The 15% Fee is too much and too early. It can be revisited mid-bull. I suggest a start at 5% so it doesn’t hurt people and you stay attractive as opposed to Orca or Raydium. As much as possible, you want to be lower than the current leaders when it comes to pools. Gain the trust and loyalty of your users until you TGE. Then you can start increasing the fee gradually until your desired 15%.
If MET token is out, you can also propose that 2.5-5% of the fees can go to buybacks of the token. This way, you help the token and the community believing in you.
A sudden fee jump like this will potentially kill your momentum.
I’m all out for sustainability, just not sudden moves like this.
25 Likes
I wish for Meteora to be a healthy and growing platform and therefore of course support protocol fees!
At the same time I am also a little concerned about their height. To be able to understand and form a clear opinion on the proposed values I am having two big questions:
- What exactly should be done with the generated funds? I obviously don’t know any real numbers, so for the time being I tried to get a feeling of what amount we are talking about with the following approach only for DLMM pools and came up with at least $562,500 protocol fees per month. This number will obviously grow if platform growth and/or bull kicks in. It could help a lot if the community can understand how much of this money will be used for what exactly. This refers also to the transparency point from Sholps earlier.
I might be missing sth or my sunday brain is completely out of order, so pls correct me if I am wrong!
Where does my number come from?- $150,000,000 should currently be a good approximation the daily swap volume according to the UI and solscan.
- $100,000,000 of that should be swapped in pools with fees <= 0.25% (checking the fee-% of the first few pools with the highest swap volume gave me that feeling, might even be less).
- $125,000 at least in DLMM fees daily for pools > 0.25% fees (I continued conservative and used 0.25% as average fee for the remaining $50,000,000, so 50,000,000 * 0,0025 = 125,000, might even be more).
- $18,750 are 15% of these 125,000 daily.
- $562,500 monthly (30 days per month).
- It might be the case that zero fees are not driving growth in a significant way. But this is only one aspect to look at it (of which I also don’t understand without further data how this was measured and evidenced). The other question to answer would be: Can (high) protocol fees hinder growth? This refers also to 2. and 3. from itschieph earlier.
I guess the other points have been brought up already from the perspective of LP-ers whether and how many can still earn enough money to reward the risk and effort of providing liquidity in a way that feels adequate. Without having real data, so really just a gut feeling, I personally would be somewhere between 0.1% - 3% as protocol fee.
But I am sure you will come up with a solution that is best for the complete ecosystem, so the platform and its users.
I want to see Meteora grow to its full potential but 15% seems too much too soon…Still need to be the most attractive one on the party to get by without a TGE
I’m in favor of the proposal, with one adjustment: raise the cap on dynamic fees from 10% to 11.5%. That way it should have minimal impact on the profitability of LPs on meme pairs when dynamic fees max out.
2 Likes
The proposed fees are too high. Your reasons for growth are also disingenuous. To say 0% fees does not drive growth is not true- it does. And the point tracker and airdrop is the obvious reason for growth.
Growth was a combination of users farming for an airdrop and liquidity providers being able to make money because of the 0% fees.
There are also people (like myself) who having been LPing, attending spaces and boot camps but haven’t found the time and missed the window to apply to get the LP army role.
I don’t agree or disagree with the fees being turned on the the reasoning seems off, proposed fees seem too high, and there’s no DAO / LP army counsel yet.
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I think adding a fee is obviously needed for the continued growth/sustainability of Meterora.
I do think 15% is too high though as Orca does charge less with additional incentives as token buy backs. As well as generally Orca and Ray you are top of the book at most times and would feel less effect due to the high frequency of trades, whereas dlmm is for taking advantage of the poor concentration in these pools and forcing the market to fill and pay a larger fee when price moves. Therefore since you have less frequency i think this % of fee in most cases would have a much larger impact.
If the 15% is to happen this should solely be on the base fee so lps that are taking the most risk on new high volume/volatile pairs can still be compensated for the risk by the dynamic fee.
I have been regularly using DLMMs for only about a month and almost entirely in pools above 0.25%.
I checked my PnL stats, and divergent loss has been about half of my fees.
So a 15% tax on fees would take 30% of my profit. The last month has been very bullish for memes. In a normal market, I’d expect the protocol fee to become more than 50% and in a bear market, it could easily be more than 100%.
I fully support the protocol having fees, but don’t think over 10% is reasonable and it would definitely affect how likely I was to use Meteora.
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Love that you’re putting this out there — first and foremost.
I’ve already contributed some likes on proposal which I believe garner some good points, I won’t belabor those.
Rate
As mentioned in many posts, without governance and buy back structures — it just doesn’t work right. Meteora has by my account outpaced Orca and Raydium for smooth, configurable, and understandable UI/UX — but I wouldn’t be so sure people would take a 15 to 5% “tax” just for smoother interactions — particularly those with large capital.
You may still attract the common user — which is a great market — but will substantially cut your volume and market share in doing so.
Fund Use
Even though I appreciate the LP Army and am part of it — saying that the tax will be used to expand that is a bad “catch all” proposal for the fees we’re talking about. Sure, some small percentage to give people a few hundred bucks a month for discord/running classes makes sense in the long run. However, it can’t be the sole mentioned focus.
Focus on development and product improvement with any funds you create, and let LP Army funding be individual votes to distribute (a la JUP DAO) and approve. This points to $MET and DAO structure however — and I understand you may be skipping around that intentionally.
Suggestions
I think by having scaled rates (examples below) you may be able to both focus on large capital and support meme trading.
Note — these all assume a lower fee, and buy back structure or clear ROI for users
- Scale rates over time — 0% fee has been an incentive — so propose to do it slowly and make it dynamic (with future DAO approval) to find the right market share vs fee structure
- Risk-Cognizant Pools — Memes are risky, particularly in the first 24-48 hours — explore having 0 to 1% fees over this time period — or 0 to 5% — scaling with some sort of TVL per pool metric.
- LP Army DAO — let the LP Army be a snapshot of temporary governance structure — not just for feedback. Weight their votes at a lower rate — but until MET DAO is established, let them have a say in decisions (not just comment) — they’re some of your most vocal and active users — and can help approve/amend/reject things such as LP Army Funding/Chapters you mention.
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Good proposal for meteora growth, although I think that to maintain the TVL it would be better to have 10% instead of 15%.
My comments focus on the area where I have the most experience: startups and long-term investing. TL;DR Tentatively supportive of this proposal, with support contingent on data subsequent to any change (can always modify later).
It’s essential for Meteora to somehow demonstrate it offers something worth paying for, even if it’s not profitable overall. There is some truth to the Hanneman “zero revenue” meme, but the strongest exits come from clear growth-loops worthy of operating at a loss. Meteora wants to play the long-game which means proving out a business case outside of the high TVL pairs where fees are being whittled down to nothing via competition (and aren’t affected by this proposal anyway).
So, can Meteora dominate the memecoin pool/tech business for a number of years? And will the MET token be more valuable with a demonstrated growth loop rather than using it to offset divergent loss for LP’s? These are the key questions. My opinion: potentially, yes on both.
I think memes will have a long-tail, will continue to generate high fees, and may turn into something more than merely ephemeral trends and celeb-coins in the end. But rather than drone on about my theories I’ll stop here.
As for the exact percent, personally I tend to lean toward higher because it gives more information to Meteora and the market about the potential business here.
Also, I feel obliged to mention that in past discussions pro MM’s have indicated they discount the value of inflationary rewards (i.e. governance tokens) to near zero, so nearly all emissions are sell pressure on MET. If Meteora can establish high value perhaps market participants will look at MET differently. Meteora already distinguished itself from other projects by cramming down VC/equity positions after FTX/Mercurial to grant more value to founders and community. I’m super impressed with this history 
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why not LP a percentege of the fees earned compound the profits and then do a quarterly airdrop for the LPs again…That way the protocol earns and makes extra and the LPs get a share of the fees back from time to time