The initial proposal to lower stability fund fees from 0.5% to 0.1% was discussed ~3 weeks ago here
While I haven’t spent the time to do the analysis, I personally disagreed with the original proposal of such a drastic change. I feel that, in time, lower fees on the stability fund will lead to increased volume, enough of an increase to justify a lower fee, but right now I don’t believe that is the case. The previous proposal has simply lowered the revenue of the DAO without leading to a large enough increase in volume.
There was some discussion about it on discord as well. Overall, I think lowering the fee was too much too fast without enough liquidity and volume. The Stability Fund is pretty essential for Balanced right now, and generating revenue from people utilizing it is important. It’s like 1 month of tbill revenue, but recognized at time of trading.
Let’s raise the fee from 0.1% up to 0.3% as a happy medium.
I agree that it is a bit to early, we do not have enough liquid arbitrageurs to make this profitable. I do think keeping this fee low will be important in the future, but as you say at this stage we could have it a bit higher. But if these things pick up with more good arbitrageurs competing and more liquidity, I think the trading fees will eventually outperform the decrease of profits from lowering the fee.