Thanks for your comments . Hope you’ll join us at the FOX Tokenomics Workstream kickoff call this next Monday at 2pm ET (add to calendar) where we can discuss this model as well as alternatives in more depth.
In the meantime here are some responses to your points:
goodfaith:
Fees don’t have to be inherently a “bad” thing. Having fees would entice others to own FOX for the described benefits and using those fees to buy Fox to burn would put healthy economic pressures on the value for token owners. I’m not sure how much revenue goes through Shapeshift or what other discussions have been had with protocol partners - as that probably informs your perception and inspires how you see a product you are more familiar with than I.
Fees also aren’t inherently a “good” thing. Adding fees only equates to revenues if users are willing to pay those fees. I am not anti-revenue at all, just believe that the path to maximum revenues does not involve adding fees on protocols.
goodfaith:
Stellar is a technology that I like quite a bit and Stellar has a transaction fee, but it is nominal. See. Although the purpose of the fee and the utility of the fee might differ, it is still a fee from a “middle man.”
I’ve never argued against protocol-level fees, such as the fees charged by DEXs nor the fee charged to compensate miners/validators of a blockchain. I’m saying that as an interface to these protocols, I really don’t think we should monetize by adding additional fees on top of protocols, as this would not only be lame, but also opens the gates for competitors to fork our open source code and charge slightly lower fees (or no fees) while encouraging users to seek alternatives that do not charge extra, easily avoidable fees.
To use your Stellar example, do you think we (an interface) should add fees when a user sends Stellar (a protocol)? I think the DAO will earn far more revenues if ShapeShift instead charges no additional fees when a user sends, and instead works out a deal with Stellar to offer a free and open source interface and be compensated in other ways by the Stellar ecosystem for the value that we add.
In this open source world, especially in a world where the majority of protocols already offer their own free interface, adding fees is not a winning strategy and will add direct friction to the network effects that are imperative to the success of our mission. If we can instead add no fees and reward revenue-generating user activity with FOX, we can cultivate powerful network effects that cannot simply be forked.
- goodfaith:
Use a protocol for free and rewarding free tokens??? This is a bit perplexing. Again I do not know how many people use Shapeshift - I used it in the past, but transparently I use Metamask quite a bit for many things? Are we begging people to use Shapeshift? That just seems like a poor economic model doomed to fail.
I can’t help but smile when reading this 1f642 The fact you think this model is so doomed to fail only makes me more bullish on it. Although it’s admittedly quite different than the legacy business models you’re accustomed to, I actually think the craziest thing to do is try and apply legacy business models in this new web3 world. If users’ activity generates revenue for a DAO, why shouldn’t they receive governance tokens as a reward? Not only is this a powerful user acquisition strategy (as evidenced by 57% of Uniswap’s TVL being transferred to SushiSwap within a week), but it’s also one of the most effective ways projects have figured out how to distribute governance tokens widely and fairly. If you prefer not to reward users with governance tokens, what do you think would be a more effective way to distribute these governance tokens widely and fairly to community members? In what way does burning tokens help us achieve decentralized community ownership?
goodfaith:
As a side note, a question I would have - is your perspective shaped as such because your frustration of being out competed by a competitor - namely the one mentioned by name, Metamask?
Lol, no. I use MetaMask too, but I would never swap through it. I believe the world deserves an alternative to MetaMask; one that is open-source, community-owned/decentralized, multi-chain, and free. This is what we’re building.
MetaMask users will be welcome to connect their wallet to ShapeShift to access the same protocols for free, and FOX will be a compelling method to entice them.
Do you use MetaMask’s built-in swaps? Why or why not?
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For you or anyone interested or skeptical of this crazy concept of not charging fees and giving out tokens to your users, please check out this talk I gave recently at the Ethereum Magicians conference: ETH ÉCOLE 2021 (Paris): Building a Future Without Fees - YouTube
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And all of the above said, I promise to be open minded 1f642 looking forward to hearing other ideas too.