Blur Fee Switch Discussion

Thank you for the proposal, I think it is very well written and agree in most of the points.

I think all of us know $BLUR token should have more utility in the ecosystem and I’ll be happy to support such efforts when the time is right.
However, as others already argued, I agree that path to profitability should be taken in more favourable conditions, otherwise you could discourage people from trading on Blur and lose marketshare.

There are two large pushbacks from my side

Test fees on Blend first
Where I could see the fee switch argument going is non-essential services, such as BLEND where traders already pay very variable fees and therefore they aren’t so sensitive to prices.
Also, this could be a first test of this dynamic to see what impact on market it would have.

About $BLUR Burn
One of the reasons why Blur is the best product in class is that it has the most liquidity. It has liquidity because it’s incentivised via token BLUR token.
The Blur team has been very vocal about giving >50% of tokens to community this way, therefore we can expect 1,5 bil. BLUR tokens as incentives. That means ~ 3 more seasons incentivised via inflation, but what’s next?

If we don’t want liquidity on Blur to dry out, platform fees will need to be redistributed as for example on Uniswap. Therefore, burning 100% fees won’t be good for protocol in the long run.

My proposed changes
If we want to drive value to the protocol long-term, please consider this:

  • Fees on Blur core protocol stay 0% until better market conditions
  • Fees on Blend are changed to 1% with your proposed structure of discounts for holding $BLUR
  • Fees paid are transferred to SC to buyback BLUR token
  • 100% of this is transferred back to community treasury to incentivise further liquidity in following years (this shall be changed to 10-20% token burn once protocol shows higher profitability).