BIP3: Increase Origination Fees to 1.15%

BIP3 is in reference to this discussion regarding increases to origination fees.

Based on the mixed feedback in the discussion, we will propose a small increase in origination fees compared to the original larger proposal.

Current Origination Fee = 1%

Proposed Origination Fee = 1.15%

4 Likes

I’m glad it’s a small jump in %. I would of voted no if it was say 2%.

1.15% is a yes from me!

Hey @Snowonseas these threads are strictly for record keeping. I’m going to erase this comment to keep it clean but please feel free to repost on the discussion thread

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100% agreed. if can increase more. still feel 1.15% is a bit too low. make it 1.5 or 2%

This is marginally small. I agree it should be raised to minimally 1.5%. It’ll be nice if we can have on-chain governance parameters to decide what is a better percentage.

Increase the fee to 1.25

What about having to burn 0.5 Balanced every 3 months to stay interest-free?

What about either a 1.5% origination Fee
OR
You can Burn the equivalent of 0.75% usd of Baln tokens.

Gives Balanced another use case and helps the tokenomics

Good suggestion. burn , may be can share or deliberate a bit how the concept with burn?

I think no need to burn.
Baln is already decreasing quite rapidly everyday already.

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I think 1.25% or 1.5%

Added a poll to see what others think. I believe the proposal can still be changed before it goes live later. This is of course by no means on-chain voting. Added a poll below.

  • 1.15% is too low. It should be higher but not 1.5%.
  • 1.5% is the sweet spot
  • Stick to 1.15%

0 voters

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I don’t see any benefit in doing this really, the low origination fees is the reason that Balanced is attractive at this point. I dont think that raising the fees at this point will have any benefit to the platform or the users other than testing that we can move them.
I understand that people want higher fees so they can get more rewards for their BALN tokens but at this stage I think we need to continue to grow our user base before we look to increase fees.

Unless someone can convince me of some other way we can do this it will probably be a no vote for me. I actually quite like @bwhli 's idea in the other post of making the origination fee higher if we can also have it lowered for BALN stakers to increase utility of BALN tokens as well as increasing the origination fee. I would vote yes for something along those lines if it could be implemented.

Contrary to popular belief, adoption doesn’t come with lowering the origination fees. It is when we build integrations to other platforms and add additional utility to bnUSD.

Besides, earning rewards from taking a loan, users could better utilise the loan to facilitate financial activities.

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I want to avoid changing the origination fees by too much, until we discuss borrower rewards as these 2 things are linked.

I would prefer lower origination lower borrower rewards, versus raising origination to justify current rewards.

EDIT: Also not calling anyone out, and also this applies to myself, I would like people suggesting values, to have some sort of basis. I think throwing out gut feeling numbers is not a good method.

One way can be to see the ongoing rate at popular lenders, and then ask ourselves, how long do we want the ‘break even’ point to be. On those other popular lenders, how much volume of borrowing is for X weeks, Y months, Z years. If we know okay 85% of borrowing on platform A is more than 1 year, we can ask do we want ot compete with that and to steal that market share, if we undercut that, it coul d increase borrowing by D amount increasing network fees by E.
If anyone has any such insights, or knows where to get them, please help everyone else out.

EDIT2: Also I would like any error in judgement to be on the ‘too low’ side. If fees are too low, we lose some revenue, if fees are too high, we can kill growth, which is IMO a worse outcome

3 Likes

I agree with this, origination fee and borrower rewards are closely linked. So we should avoid increasing origination fees right now and then cutting borrower rewards afterwards.

That said, I’m not opposed to a small increase of 0.15%. But I do think it’s probably best to discuss origination fee adjustments in combination with borrower rewards adjustments.

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What about this: Let the origination fee depend on how much #BALN you have staked. Minimum staking period could be 1 month.

Example:

Staked BALN = 50% ore more of your desired loan amount —-> origination fee will be 1%

Staked BALN = 25% ore more of your desired loan amount —-> origination fee will be 1,5%

Staked BALN = 15% ore more of your desired loan amount —-> origination fee will be 2%

Staked BALN = Less than 15% of your desired loan amount —-> origination fee will be 2,5%

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Completely agree, but what is the end goal of raising the fee while the platform is still in the growth stage and we don’t have this additional utility yet? I’m sure it will come with OMM and BTP around the corner but I haven’t seen an argument for putting the fees up other than yea why not give it a go.

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ya, agree on these as well.

Hey guys - I really appreciate all this discussion and love to see the engagement but it’s just not in the right spot lol please take it to the discussion thread mentioned in the BIP above. BIPs are to save a history of the actual proposal, not for discussion. I’m going to see if I can move this discussion to the other thread, but if that’s not possible, unfortunately I need to clean this up

2 Likes