Proposal for a volume-proportional fee sharing system

I think this is a nice idea, but unfortunately it isn’t trivial to implement in a privacy-preserving way, as far as I can see (and you don’t want to publicly reveal your NAM stake every time, as this would make your shielded transfers linkable) - so maybe a good idea to bookmark for the future.

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I’ll need to think about this but I can’t help but feel this might be useful in this context.

Appreciate your time :student: :heart: :shield:

I think it’s important to note that we need value capture somewhere - otherwise all the adoption in the world wont make Namada sustainable.

Railgun is 0.5% fees (0.25 in/out) so in terms of barriers for users we have an advantage there.

For MASP asset depositors, over time you’d expect the MASP rewards to surpass the fee - so it could even encourage more consistent liquidity.

Of course 0.1% may deter more users than 0% - but I’d expect users with a genuine need for privacy to be willing to pay a fee and we get the bonus of value capture.

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90% of the fees collected will be used to purchase Anoma’s initial tokens and distributed to the fee contributors. In the future, 90% of the fees collected will be used to purchase the initial tokens of other projects. I believe that many people will adopt NAM.

Wanted to share an update here: I’ve chatted with some more folks and – under guidance of the maxim “PMF above all else” – I think it might be good to adopt a “two-phase” approach here to deployment in order to allow frontend operators to test what fees make most sense since they have the most direct relationships with users.

This would mean that instead of upgrading the protocol right now, we add support in the Namada SDK for “customizable withdrawal fees”, so that frontend operators can add a second output when the user shields or unshields which goes to the frontend operator (and they can pick what fee to set and what schemes to experiment with / harmonize those choices in a way that their users are happy with). Then we can collect some real user data from decentralized frontend fee experimentation, get clear evidence of what scheme(s) make most sense, and later upgrade the protocol to split the fee.

Thoughts?

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I think either everyone should have the same flat fee, for fairness between user choice for the app .
And if the commission will be customizable, then there should be restrictions on the minimum and maximum commission (allowable values).