RFC: Add 15% Protocol Fees to DLMM Bootstrapping Pools

Meteora is a strong community-led project where important decisions have been decided by the community e.g. 10% LP Stimulus mechanics, Dynamic Vault relaxiing percentage, protocol fees and now important community-driven programs like the LP Army Boot Camp. The community has accomplished so much without having formed a DAO nor having a treasury to leverage upon, but, I believe that community initiatives like the LP Army Boot Camp would benefit if there was a treasury that can support this and other initiatives.

I’d like to propose adding a 15% protocol fee to DLMM Bootstrapping pools in order to fund this treasury. All other pools would continue to operate with zero protocol fees for now.

A fee would be commensurate for the ongoing development Meteora makes to tackle typical launch issues as well as the manual setup needed to ensure a successful launch.

What are your thoughts for adding this fee for our next launch?

Ben

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@ben I’m 100% on board with this. Let’s turn it on for the launch of my token, which will be using a bootstrapping pool. As you know, the launch model for my token is a bit unusual, and because of the launch model it probably won’t generate a lot in fees for the bootstrapping pool. Nonetheless, I would be glad to pay a 15% protocol fee to demonstrate my support for this proposal.

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Def agree with this.

Not sure about the mechanic, but do you think is also good to have some extra MET points incentive for this bootstrap pools to push this faster?

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A 15% fees seems a little too high in my opinion.

How did you come up with the 15%?

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Hey everyone, that’s my first post on the forum but follow meteora since it was mercurial back then.

On the proposal i’ m not against adding some fees to fund the treasury, but 15% seems really high.

I’ve got few questions and improvements,

  • 1 that would be great to have a model on how much $ that would represent if that fees existed on the previous launch ?
  • is that a treasury goal to aim ?
  • is that fee will remain after TGE ?

And i’m concerned that other protocols will keep their marketshare and met loose volume/ protocol during launch with a fees that high

Is there some already projected expenses that need to be funded with this fees ?

Best - Huzmond

15% is a little on the high side if you consider normal LP use case given Raydium/Orca charge 12-13%. However, this is not for normal LP pools. DLMM Bootstrapping pools are designed for token launches and are only used for that. Additionally there is a lot of manual work done behind the scenes to ensure a smooth token launch. I actually think it’s a pretty good deal given fees people normally charge to launch a token.

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I think this is key for this proposal. This is also why I actually think 15% is on the low-end here. My personal take would be 20-25%.

Meteora is sitting on very good launching mechanism that has no competitor at the moment. A launch at an exact timeslot, announced ahead of time, allows for a fair launch to occur. You can hear about the launch ahead of time. The amount raised is also directly related to the price that it settles at.

Let’s remember that this is what the team that launches a token want: To raise money based on how successful people believe they will become. Their primary goal is NOT to generate fees. This is a much better deal than alternative launchpad, where they take a % of the RAISED amount. Unless I misunderstood here.

I think this might attract the more serious team, even in the memecoin space, as launching on the Bootstrapping pool will signal a higher seriousness.

The downside is also not bad, if we don’t manage to attract any launches, that’s okay. It was worth a try, and we can still compete heavily in DLMM and Dynamic Vaults.

If it works, it could become really big.

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Is this a 15% trade fee?

Love this proposal and think adding the fee for the next launch would make sense. I also think it demonstrates the potential of Meteora to add value to the Solana ecosystem.

As for the fee rate, I’m in the “more than 10%” camp as well.

No this would mean the protocol would get 15% of the trade fee and 85% of the trade fee would go to the LP. Right now 100% of the trade fee goes to LPs. LPs would still get 100% of fees in all other pools except for the DLMM Bootstrapping pools.

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This is only for DLMM Bootstrapping pools that are designed for token launches.

If a project wants to launch on a normal DLMM pool to avoid that fee they can, as its permissionless. These pools charge 0% fees which is less than Orca/Raydium right now.

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Amazing idea, i think educational in Defi Tools its a must have. :blue_heart:

Assuming this applies for both JUP LFG & normal launches (like blackfin) through Meteora right?
Sounds good to me, 15% on the launch pools should ramp up the treasury really quick as fees are high during launch times.

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It’s definitely worth trying it. Go for it!

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And for launches using Meteora via Jupiter?

Jupiter take 1% of total supply of the launched token.

And Meteora who provide the Bootstrapping?

I think Meteora itself should eat a slice of this Pie too.

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:arrow_right: I’d like to see this CATEGORY clearly distinguished in the app so as not to confuse it with standard DLMM pools.

:bulb:A special LOGO next to the pool pair name would be welcome.
:exclamation:The best thing would be to have a separate section entitled "DLLM Bootstrapping " reserved for this type of pool so as not to mix them up with the others.

:card_index_dividers: There’s already a lot of information to take into account when selecting a pool (pair name, bin, fee, TVL, volume, LM apr = 6 PARAMETERS).

:pray: Anything that can relieves the demand for USER ATTENTION will be greatly appreciated.
Improving comfort makes the difference with other platforms.

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Yes, it would apply to both.

Great suggestion, we will work on this.

I would just point out that after launch these pools do work exactly like normal DLMM pools. Also these pools normally have high base fees like 2-5%.

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15% fees .If its comparable with other providers, a good iniative.

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Traditional DLMM liquidity providers (LPs) offer a service to the DEX by acting as algorithmic market makers, supplying liquidity according to their DLMM pool parameters. These LPs risk their own capital and, in return, earn a pro-rata share of the pool fees accrued.

Bootstrapping Pools are used by teams as a form of initial distribution and token price discovery. Teams provide native tokens and create a price range and curve within which tokens are distributed. As the pools are one-sided the team only allocate tokens which were reserved for public distribution; limiting their risk.

Based on the above, it is clear:

  1. Teams utilizing DLMM pools are less price-sensitive than traditional LPs, as their incentive is token distribution and creating a liquidity backstop rather than earning fees.
  2. Traditional LPs can be seen as service providers. Teams utilizing DLMM bootstrapping pools architecture for initial distribution are utilizing a service; therefore, taking a percentage of fees is more appropriate.

The demand for DLMM pools through the Jupiter launchpad is high. Protocols must apply as candidates and win a governance vote - this process is competitive (e.g., LFG voting round #2 saw 6 candidates for apply for 1 spot).

The fees on the DLMM bootstrapping pools are significantly higher than normal pools (2-5%) while generating large volumes. Therefore, implementing this 15% fee would likely generate substantial revenue for the DAO.

We recognize the proposal is in its early stages, but we are supportive of it. It would be interesting to get additional data about the expected revenue this fee share would provide.

3 Likes