This Week: Five VIPs Up For Vote on Nov. 15, Lisa Tan talks Vesper Treasury, Vesper Lend Update, and More
Also: Vesper Publishes October Report, Money20/20 Replays Now Available, and Aggressive Pool Insights
Community Vote on Nov. 15
Governance discussions for five proposals are currently ongoing at the newly launched Vesper Governance forum. These proposals outline the following:
- Vesper revenue, treasury, fee upgrade, by Economics Design
- DeFi Pulse Index (DPI) whitelist, by Index Coop
- Multi-Chain network and token whitelist, by Vesper Brewing Co.
- Token Whitelisting Frenzy, by Vesper Brewing Co.
- Vesper Orbit, by Vesper Brewing Co.
The DPI proposal demonstrates how third parties can engage their projects with the Vesper ecosystem. Vesper treasury upgrades kick off the transition of Vesper to a sustainable model. Multi-Chain whitelist enables Vesper’s multi-chain ambitions. “Token whitelisting frenzy” introduces Vesper to the next class of promising assets. Lastly, Vesper Orbit opens the door for Vesper to become a first mover in supporting emerging, high-APY DeFi 2.0 tokens and other exciting protocols.
Late-breaking: Should the Economics Design proposal pass, Jeff Garzik has proposed zeroing-out the withdrawal fee for pool-to-pool transfers, in such cases where “the withdraw token from the old pool (e.g. ETH) and the deposit token into the new pool (e.g. ETH, again) are the same” and “where the withdraw pool and the deposit pool are both Vesper Grow or Earn pools.”
Vesper Lend Update
Vesper continues to update its community about the aftermath of the attack on Vesper Lend (beta) from two weeks ago.
AMA: Lisa Tan On Vesper Treasury Proposal
This week’s AMA featured Lisa Tan, Founder of Economics Design, who answered questions surrounding her recent treasury proposal. Lisa was Vesper’s first external guest speaker in the weekly AMA series, and was certainly a pleasure to hear from!
Some highlights below. To view the full discussion, check out the #ama channel in the Vesper Discord.
Q: Withdrawal fees currently make up 93% of protocol revenue. With many users considering withdrawal fees before using a particular yield aggregator platform, do you believe it is sustainable to rely on withdrawal fees to continue providing 93% of protocol revenue?
A: That is a good point. Relying on withdrawal fee is not sustainable — that’s why the plan is to move it towards yield fee and not withdrawal fee. However, this requires time to make that switch.
Q: Can we just reduce the withdrawal fee to 0%?
A: We found that 93% of protocol fees have come from withdrawals rather than yield.
This indicates that the withdrawal fee should not be dropped too drastically in order to retain enough revenue to cover the operations/marketing budget requirements. That’s why we need to keep the withdrawal fee. Now, what about the intra pool transfers? We noted that 3.6% of capital and 10.2% of users are withdrawing and depositing to a new pool on the same day — this is based on the same wallet address within a 24h period. It is reasonable to deduce the behaviours of users this way, to understand the “intra-pool” transfer.
Lowered withdrawal fee for pool swaps should increase retention to the ecosystem, withdrawal fees currently disincentivize switching pools. That’s why we need to maintain those numbers — both from a quantitative and qualitative perspective.
A higher expectation of the portion of users paying full withdrawal fees does improve revenue projections. With greater buffer for hitting operations budget targets, there is more room for lowering pool transfer fee (after seeing real impact of this change at 0.3%).
Q: On the fee model: Based on your recommendations, there would be a set fee to go between pools in the Vesper ecosystem. What drove this decision? I think there is a benefit to having no fees to keep funds on platform, but the drawback is then less contribution to the platform sustainability model (buybacks).
A: The fee to go between pools is based on the analysis that we calculated. We compared % of users leaving at 0.6% (same, no change) against a variety of withdrawal fees from 0.0% (because you guys talked about it a few times, and we want to test if it is feasible) to 0.5% (because that will have least impact on protocol revenue, given all things equal). And as I shared above, anything below 0.3% in inter-pool transfer fee leads to too much loss in revenue (up to 100% more than just reducing fees, all things equal), and that might be too much change for the system.
As much as we would like a 0.5% change, as that makes sense in our data, a 0.6% and 0.5% does not have much significance in the fees, which probably makes no sense to the community,
There are still some fees involved, as the fees are operational expenses to run the protocol! After all, it is a decentralised system that is not paid for by anyone, but communally owned by everyone. That is the beauty of a decentralized market.
The next AMA will take place on Thursday, November 18. Stay tuned for additional details.
October in Review
DeFi-ing Expectations Conference
Co-founder Matthew Roszak joined fellow DeFi experts to discuss groundbreaking investment products and how to offer institutions exposure to DeFi.
A recording of the panel will be shared once available.
Money20/20 Recordings Now Available
Couldn’t make it to Money20/20? No worries. A full replay of Vesper’s Sunday talks is now available on the Vesper YouTube channel.
(Apologies in advance for the audio. Try as we might, we weren’t able to pull the audio from the boards.)
Global Video Competition Deadline Extended
Good news, Vespernauts! You have until midnight ET on November 23 to submit an entry for the Vesper Earn global video competition.
Don’t forget to check out the full rules and details!
Insight of the Week
Two weeks ago we saw the now-in-production aggressive pools gain a lot of attention after their launch on the main app. This week, we’ll take a look at the short term evolution of the ratio between aggressive/conservative funds and link this to the upcoming VIP regarding the whitelisting of new assets.
Looking at the ratios of the DAI, ETH and WBTC pools, all pools had an increase in ratio (aggressive/conservative) over a short 10-day period. This means that the aggressive pools are getting more popular relative to the conservative pools, and this is happening quite fast in the case of the DAI and ETH pools.
This interesting dynamic neatly fits with one of the upcoming proposals, “Token Whitelisting Frenzy,” which focuses on listing more tokens for new, aggressive offerings.
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