Raising the paid lp fees

Since honeyswap is a fork of uniswap the fees paid to liquidity providers are set at 0.3% by default. Although the gas fees are much lower on xdai, I think the incentive for moving here isn’t enough yet.

Farming is a great tool to get new investors interested and has been successful. It also creates more sell pressure in these early stages.

I would like to discuss the idea of raising the trading fees to 0.5% for a determined amount of time to incentivise all existing and new pools without giving away free honey for each pair. Save the farming for strictly honey pairs.

I feel this would bring liquidity to honeyswap faster and keep the liquidity here long term. I feel there would be less sell pressure on honey also.

Is this an option?


What should our UNI fees be?

Good thought theJeweler, Our current fees are 0.3%, this makes us competitive up to $740 round trip trade (RTT)

Based on a previous analysis I did I think our target trader needs to be either:

  • Less than $650x2 = $1,300 RTT
  • or Less than $1,300x2 = $2,600 RTT

Unfortunately, under our currently liquidity levels we actually need to drop our fees to 0.1% to pick up our smallest ideal audience. I don’t know if we want to do this but it is a thought until we get liquidity to offset our slippage. UNI continues to be competitve on larger trades even with high mainnet fees, this is because of their low slippage.

Edited notes: the slippage is determined assuming $1M liquidity, same as other analysis.


I think this is a cool idea. I think it will be even better if the 0.5% fee is automatically used to buy HNY and then distributed to liquidity providers. This will create a demand case for HNY and help with value. However, It would be nice to have some data to work with to see if it’ll be even worth it in the first place. For example, with the current 0.3% fee, what’s the daily average fee earned in each pool? What amount of HNY can it buy and will it be enough to incentivize liquidity providers? We have to know if the incentive will be worth it at the risk of charging fees more than uniswap which will already be a turn off to intending honeyswap users, this is risky especially when you consider that we need to encourage more users not scare them away or give them a reason to doubt, plus our low liquidity problem. So if we must increase fees we must have to make sure that the benefit will outweigh the risk.

Thank you for this post!

The relatively low trading fees are one of the reasons that made me go and try honeyswap.
Going beyond 0.3% risks reducing the number of active traders on honeyswap.

A table for comparison:

Taker Maker
Binance 0.10% 0.10%
OKEX 0.15% 0.10%
Bitfinex 0.20% 0.10%
Kraken 0.26% 0.16%
Uniswap 0.30% 0.30%
Honeyswap 0.30% 0.30%
Coinbase Pro 0.50% 0.50%

@omahs has a great point
The majority of people come to Honeyswap for the low trading fees, and most of them come from Uniswap which i believe has the same base LP fees + the eth fees which we all know can be pretty big.
Comparing the base LP fees between exchanges is something a lot of people do, even though it is a small % of the total fee given actual ETH gas prices. but people aren’t always rational.

We should aim to keep the competitive advantage of the exchange, and maybe even increase it. Because 1hive, Honeyswap and any DAO is as strong as their community is, so i think the inflow of new people is a crucial issue we should not take lightly

I’m tempted to say we should reduce the fee’s by 1% to be cheaper than uni.

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hahaha yeah me too, that can be an awesome marketing strategy

We already beat uni on fees for individual trades below $370. The ONLY significant way to beat UNI on trades is to address slippage. Because slippage is a percentage of the trade and the rate increases while size of trade increases makes this an exponential fee.

We would have to redeploy all of Honeyswap to adjust the fees.

Imo a honeyswap v3 makes sense where liquidity fees are dynamic, but this does not make much sense while our slippage is significantly higher on important pairs vs uniswap. Maybe once we secure significant liquidity though this could solidify the competitive advantage we do have.

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Very well written, thank you. I brought this up back in early November and still think it’s a great move. Liquidity providers are looking for profits, i agree offering better incentives to provide liquidity will bring more liquidity to honeyswap.

Paired with Dosh’s well planned marketing campaign, this could be the boost that “gets a :fire: started” again.

Edit: wrong post lol