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Implement new fee model logic for Balancer v2 Fee Sweeps #25

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Xeonus opened this issue Jan 10, 2025 · 1 comment
Open

Implement new fee model logic for Balancer v2 Fee Sweeps #25

Xeonus opened this issue Jan 10, 2025 · 1 comment
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@Xeonus
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Xeonus commented Jan 10, 2025

The DAO ratified in a new fee model with BIP-734. The most important change is in regards to the fee percentages and how non-core pool fees are handled:

  1. Maintaining current fee structure: 50% on yield, 50% on swaps
  2. Core pool framework adjustments:
    2.1 Discontinuing non-core pool fee redirect to core pools (as introduced per [BIP-457])
    2.2 Same fee split as v3: 70% as voting incentives, 12.5% to veBAL, 17.5% to DAO
    2.3 No other change to the existing framework
  3. Non-core pool framework adjustments:
    3.1 Same fee split as v3: 82.5% to veBAL, 17.5% to DAO

For the fee allocator logic this means the following:

  • Calculate the total amount of fees earned for a core pool
  • Only assign 70% as voting incentives, rest is split to veBAL (12.5%) and the DAO (17.5%)
  • For non-core pools, do not reassign fees and distribute to veBAL (82.5%) and the DAO (17.5%)

In other words, we need to first calculate / estimate the fees earned for each core pool and distribute fees according to that ceiling. Additionally, handle the rest of the fees coming from non-core pools as one pot that needs to be exclusively distributed to veBAL holders and the DAO and omit the reshuffling / recycling logic into core pools.

@gosuto-inzasheru
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possible implementation direction: BalancerMaxis/protocol_fee_allocator#303

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