Introduction
As SaucerSwap solidifies its position as a leader in the decentralized finance space, our commitment to sustainable growth and community-driven governance remains unwavering. Reflecting on the progress made over the past months, this update not only highlights the expansion of the SaucerSwap DAO’s responsibilities but also introduces the upcoming implementation of an interface fee. These pivotal steps are part of a broader strategy to enhance the protocol’s long-term sustainability and governance framework, building on our past successes and setting the stage for future developments.
Governance Update
The SaucerSwap DAO, recently formed on-chain to govern key aspects of the protocol, has quickly expanded its responsibilities. Originally focused on managing V1 and V2 incentives, the DAO’s scope now includes treasury management, marking an important step in decentralized governance.
The SaucerSwap DAO now oversees:
- V1 Farm Creation: Governing the creation of yield farms and adjusting SAUCE and HBAR emissions for existing farms.
- V2 Pool Creation: Managing V2 pool creation to prevent liquidity fragmentation and handle technical overhead. The DAO sets protocol fees and selects fee tiers.
- V2 LARI Campaigns: Approving and managing LARI campaigns, including setting campaign durations and token allocations.
- Tokenomics Changes: Approving significant changes to SAUCE tokenomics proposed by core maintainers.
- Treasury Management: Governing key treasury activities, including fee switches, HBAR staking rewards, protocol fees, and SAUCE buybacks. The DAO also manages liquidity, farming, and staking activities within SaucerSwap and other protocols.
Furthermore, the DAO now controls several key accounts and contracts:
V2 Incentives (Unallocated): Manages unallocated SAUCE incentives, directing them to the DAO treasury.
- HBAR Staking Rewards: Adjusts allocations of staking rewards between Masterchef, the DAO treasury, and Brewsaucer.
- V1 and V2 Protocol Fees: Oversees the distribution of protocol fees for SAUCE buybacks, managing allocations to Mothership, SaucePaymentSplitter, and the DAO treasury.
- V2 Incentives (LARI): Curates and manages LARI campaigns, including project selection and reward allocation.
- V1 Incentives (Farm): Adjusts emission weights for V1 farm pools to ensure optimal distribution.
This expansion of the DAO’s responsibilities ensures alignment between the diverse interests of SaucerSwap’s various community members — token holders, liquidity providers, traders, and others. By giving the community direct control over treasury management, SaucerSwap fosters a balanced and sustainable governance model that drives the protocol forward.
Introducing the SaucerSwap Interface Fee: A Step Towards Long-Term Sustainability
As SaucerSwap continues to evolve and grow within the DeFi ecosystem, we’re taking a significant step towards ensuring the long-term sustainability of our protocol. Today, we’re announcing the implementation of an interface fee, a strategic move that aligns with industry standards and positions SaucerSwap for continued success and development.
The Interface Fee: What You Need to Know
Starting on Monday, August 19th, 2024, SaucerSwap will introduce a 0.4% interface fee on certain swap routes. This fee will apply to both v1 and v2 of our protocol and will be implemented specifically for trades executed through the SaucerSwap front-end interface (i.e., https://saucerswap.finance).
It’s important to note:
- This fee is specific to the saucerswap.finance interface and does not apply to other platforms or aggregators that might interact with SaucerSwap’s smart contracts.
- The fee will only be applied when swapping to the following output tokens: HBAR, HBARX, USDC, USDC[hts], USDT[hts], DAI[hts], WBTC[hts], WETH[hts]
- The fee is calculated based on the output amount. Mechanistically, the router contract receives the full output amount, sends 0.4% (0.004 * amount) to the fee collector, and transfers the remaining 99.6% to the user.
- All stablecoin-to-stablecoin swaps will remain exempt from this interface fee. For this purpose, stablecoins include USDC, USDC[hts], USDT[hts], and DAI[hts].
- This fee is separate from the 0.3% swap fee for trades in SaucerSwap v1 (which applies to all pools) and from the variable fee tier in SaucerSwap v2. Those fees are imposed at the core contracts, while the interface fee is set in the router contract, which is a periphery contract.
Driving Sustainability and Development
This interface fee represents a crucial step in SaucerSwap’s journey towards self-sufficiency. As we approach the end of SAUCE token vesting in a few years, when the maximum supply will equal the circulating supply, it’s essential that we establish sustainable funding mechanisms for ongoing operations and development.
The introduction of this fee will:
- Reduce reliance on the SAUCE token for funding development and operations
- Create a direct link between protocol utilization and revenue generation
- Ensure continued development and improvement of the SaucerSwap platform
The revenue generated will go to SaucerSwap Labs to fund ongoing development and operations. Specifically, this revenue will sustain operations by paying for infrastructure costs, development, marketing, and other expenses incurred by SaucerSwap Labs in the maintenance and development of the SaucerSwap interface.
Balancing User Experience with Protocol Health
We understand that introducing a fee impacts our users, and this decision was not made lightly. To maintain transparency:
- This fee is specifically for using the SaucerSwap interface on saucerswap.finance.
- It is separate from any existing swap fees or fees charged by other platforms (e.g., HashPack, ETASwap) that might interact with SaucerSwap’s liquidity.
- Users interacting directly with SaucerSwap’s smart contracts through other means will not incur this specific interface fee.
Because liquidity providers and users of the SaucerSwap protocol rely on a well-maintained interface and a strong development team scaling the protocol, this interface fee directly supports those goals which directly impact users. By ensuring the long-term sustainability of the platform, we can continue to provide a robust, reliable, and innovative DeFi experience for our community.
Industry Standard, Proven Success
The implementation of an interface fee is not unprecedented in the DeFi space. Uniswap, a leader in the industry, introduced a similar fee structure which has proven to be a successful model for sustainable protocol development.
Our goal has always been to create a self-sustaining, robust protocol that can thrive independently of token emissions. This interface fee on saucerswap.finance is a critical component in achieving that vision. The revenue generated will go to SaucerSwap Labs to fund ongoing development and operations, ensuring that we can continue to innovate and serve our community for years to come.
Looking Ahead
Looking ahead, several significant initiatives are set to shape the future of SaucerSwap. These include the continuation of LARI campaigns and THF ‘Spring Incentives’, phases II and III of single-sided staking, a front-end bridge integration, further UI/UX development, LARI 300, and the delegation of voting power to DAO participants. Many of these initiatives are nearing completion and have strategic overlaps.
For instance, the HBAR granted through the THF Spring Incentives campaign is being leveraged to incentivize bridged liquidity, thereby accelerating Hedera’s adoption within the broader crypto community. Delegative governance will allow proposals to be submitted anonymously, eliminating the proposer’s need to meet the 100k SAUCE threshold for account funding. It also empowers passive users by enabling them to delegate their voting power to a trusted representative.
Details on LARI 300 are forthcoming, but this initiative is expected to streamline the onboarding process for projects wishing to list on SaucerSwap’s primary front-end while also improving the user experience for traders and liquidity providers managing their assets within the web app. Lastly, phases II and III of single-sided staking will become a central focus once these other initiatives are completed. This extension of the current staking system will streamline the onboarding of new projects to the ecosystem, while giving xSAUCE and Planck Epoch Collectible (PEC) NFTs additional use cases. More details will be provided as this initiative progresses.
As SaucerSwap continues to evolve, these initiatives underscore the protocol’s commitment to innovation and community-driven growth. By integrating new features and expanding governance capabilities, SaucerSwap is well-positioned to remain at the forefront of decentralized finance, offering a robust and dynamic platform for all participants.
Summary of Article
These initiatives represent crucial steps in SaucerSwap’s evolution, solidifying our path toward a more sustainable and community-driven protocol. By expanding the DAO’s responsibilities and introducing the interface fee, we are taking practical measures to secure the protocol’s future. As we prepare for the developments ahead, our priority remains clear: to support our community and maintain SaucerSwap’s position as a robust and adaptable player in the DeFi ecosystem.
