Adjust Fee and A Parameter for 3Pool

Proposals
1

Summary

This proposal recommends updating two parameters of the Curve 3Pool at 0xbEbc44782C7dB0a1A60Cb6fe97d0b483032FF1C7:

  • Increase base fee from 0.008% → 0.015%
  • Decrease A parameter from 5000 → 4000

These adjustments are based on extensive analysis of CowSwap order flow and historical routing data, simulating over 110 million swaps across 10,000 pool configurations.

Motivation

Over the last 4 weeks, CowSwap routed a total of $1.21B in trades for the 3Pool tokens (DAI/USDC/USDT).
Out of this, Curve captured $76.2M, which is just 6.3% of the total flow.

CowSwap Orderflow
CowSwap Orderflow1662×1196 186 KB

Despite being one of the oldest and most stable pools in DeFi, 3Pool is underperforming in routing capture due to the extremely low base fee and suboptimal amplification (A) value.

To evaluate this further, I simulated ~10,000 CowSwap swaps through ~10,000 different combinations of A and fee, resulting in over 110 million swap simulations.

Findings

  • The optimal configuration for LP revenue, across trade size buckets, is:
    • Fee: 0.015%
    • A: 4000

This config strikes the best balance between competitive pricing (to maintain routing volume) and sufficient fee intake (to improve LP earnings).

Revenue Heatmap
Revenue Heatmap2464×1330 427 KB

Volume Heatmap
Volume Heatmap2580×1318 273 KB

Specification

POOL: 0xbEbc44782C7dB0a1A60Cb6fe97d0b483032FF1C7

1. Update Base Fee

Set fee to 0.015% (1,500,000):

ACTIONS = [
    ('0xeCb456EA5365865EbAb8a2661B0c503410e9B347', "commit_new_fee", POOL, 1500000, 10000000000),
]

2. Ramp A Parameter

Ramp A down from 5000 → 4000:

ACTIONS = [
    ('0xeCb456EA5365865EbAb8a2661B0c503410e9B347', "ramp_A", POOL, 4000, future_time),
]

Rationale

  • A higher fee captures more revenue per trade, especially from larger volume orders that dominate stablecoin flows.
  • Reducing A from 5000 → 4000 slightly modifies the price curve, improving pricing efficiency around typical trade sizes.

Conclusion

This proposal is the result of deep empirical modeling and should enhance 3Pool’s competitiveness and earnings. The suggested changes align with market conditions and CowSwap routing dynamics, bringing the most revenue-optimal configuration into production.