AIP 46: Protocol Fee Allocations

[agriimony]

Summary

• Incentivizing and attracting talented contributors is important in the continued success of the project
• We propose to allocate a portion of the fees assessed to fund contributor activities
• The allocation can be changed by a configuration vote
• The proposed initial allocation of fees collected is as follows
  1. Rewards - 86%
  2. Developers - 8%
  3. Ambassadors - 4%
  4. Authors - 2%

Rationale

In the current implementation, 100% of fees collected go to voting participants. Meanwhile, any growth and development of the project are paid 100% by the AirSwap AST treasury wallet.

To ensure sustainable growth, we propose that a portion of the fees be used to reward contributors. Incentivizing and attracting talented contributors is important in the continued success of the project. In the updated fee allocation framework, contributors would be incentivized to drive success of the project. This would result in a positive feedback loop - where greater volumes driven through AirSwap would result in more rewards for contributors thus attracting more talent to contribute.

Specification

We propose that 14% of fees assessed through AirSwap are to be allocated to fund contributor circle rewards. When fees are consolidated (from #26), 14% will be distributed to a Contributor Bonus Pool with the rest (86%) going to the Staking Rewards Pool. The proportion of the allocations may be updated in the future.

At the end of each cycle, the Contributor Bonus Pool will be divided in a 4:2:1 ratio among the Developers / Ambassadors / Authors circles and paid out to members of the circles in accordance to their Coordinape allocations in the respective circles (see AIP #47 for more details).

Example

Last cycle, $39,053 was collected in fees. The protocol fee would be split as follows (in the currency chosen for consolidation):

Rewards - $33,585 Developers - $3,124 Ambassadors - $1,562 Authors - $781

Credits

Thanks to the Authors circle for all their feedback

Copyright

All proposals are public domain via CC0

[gpxl-dev]

Looks good.

Could also consider burning the 8.45% that would go back to the treasury.

[agriimony]

Looks good.

Could also consider burning the 8.45% that would go back to the treasury.

Thought about that as well. Currently I'm thinking rather to put it into a vesting contract than to burn it outright

[agriimony]

Rounded the numbers to 86% / 8% / 4% / 2%