Summary:
Increase the base trading fee of the Curve pool 0x4f493B7dE8aAC7d55F71853688b1F7C8F0243C85 (Strategic USD Reserves) from 0.001% to 0.04%, and set the offpeg_fee_multiplier to 1. This recommendation is based on CowSwap order flow data and revenue simulations from a tailored model reflecting how the pool processes trades.
Abstract:
This proposal suggests updating parameters for the Curve pool:
0x4f493B7dE8aAC7d55F71853688b1F7C8F0243C85
Strategic USD Reserves
Recommended changes:
- Fee:
0.001% → 0.04%(100000 → 4000000) - Offpeg Multiplier:
20 → 1(20000000000 → 10000000000)
Revenue simulations were conducted using a customized get_dy function with full control over A, fee, and offpeg_fee_multiplier, along with balances and rates. Simulations indicate that the offpeg multipliers has little to no beneficial effect, while fee increases alone significantly improve revenue.
Motivation:
The pool currently captures 6.3% of CowSwap trade volume for its token pair:
- Captured volume:
$50,257,496 - Total CowSwap volume:
$793,025,587
While not the primary destination for flow, the pool still sees enough order flow to justify optimizing fee parameters.
CowSwap flow share across trade-size buckets
Extensive simulations across varying fee and offpeg_fee_multiplier values show:
- Revenue scales clearly with higher base fee
- Offpeg multiplier adds negligible value, and introduces complexity
Revenue vs Fee (
offpeg_multiplier = 1)
Revenue vs Fee (
offpeg_multiplier variable)
In all cases, the optimal revenue zone was reached through increasing the base fee, regardless of offpeg multiplier settings.
Specification:
POOL = "0x4f493B7dE8aAC7d55F71853688b1F7C8F0243C85"
ACTIONS = [
# Set base fee to 0.04% and offpeg multiplier to 1
(POOL, "set_new_fee", 4000000, 10000000000)
]