Summary:
Reduce the trading fee of the USD0/USDC Curve pool (0x14100f81e33c33ecc7cdac70181fb45b6e78569f) from 0.02% to 0.009%, while retaining the current amplification parameter (A=1000) and the off-peg fee multiplier (5).
Abstract:
This proposal recommends adjusting the fee structure of the USD0/USDC pool to strengthen its position as the preferred route for stablecoin liquidity. By decreasing the fee to 0.009%, the pool is expected to attract more order flow, improve routing incentives for aggregators like CowSwap, and enhance long-term fee earnings for liquidity providers.
Motivation:
Approximately 3.5 million swaps got simulated across different configurations of A and fee levels. The results show that reducing the fee from 0.02% to 0.009% leads to:
- Higher revenue potential due to increased trade volume routed to the pool.
- Better competitiveness against alternative liquidity sources for large stablecoin trades.
- Higher utilization, which benefits LPs through improved fee accrual over time.
Below are screenshots illustrating the results:
Together, these data points support the case that a fee reduction is likely to drive net-positive impact.
Specification:
POOL = "0x14100f81e33c33ecc7cdac70181fb45b6e78569f"
ACTIONS = [
# Set fee to 0.009% while keeping off-peg multiplier at 5
(POOL, "set_new_fee", 900000, 50000000000)
]