The following is a discussion thread on whether to consider reducing the current swap fee of 0.3% to 0. As members of the community, we’d love to hear your thoughts on the pros and cons of implementing such a change.
Swap fees are charged by AMMs to users who trade on their platform. The fee is typically a small percentage of the value of the trade, and it’s deducted from the amount of the asset being traded. This fee helps to incentivize liquidity providers to supply assets to the platform, and it also generates revenue for the platform.
A reduction in swap fees can attract more traders and liquidity providers to the platform, leading to increased trading volumes and higher liquidity on the platform. Reducing swap fees to 0 could make cSwap more attractive to users who are looking for a platform with zero-fee trading.
Although reducing the swap fee to 0% may seem appealing for users looking for a platform with zero-fee trading, it’s important to consider the impact on the platform’s revenue and ability to incentivize liquidity providers. The current swap fee of 0.3% is relatively low and helps to ensure a healthy level of liquidity on the platform. Therefore, we should consider maintaining the current fee to ensure a sustainable and thriving ecosystem for all users and stakeholders
I have the same opinion. I don’t think the 0,3% fee is the main issue for trading. Trading volumes are not very high throughout the complete cryptoverse. And reducing the swap fee directly impacts how liquidity providers are rewarded, which is for the long run nearly all determined by swap fees (especially if the CMDX incentives will be phased out).