QuickSwap is always looking to provide the best opportunities for LPs (Liquidity Providers) on the DEX. Previously, QuickSwap operated using a dynamic fee model on its V3 but is now looking to introduce more flexible models to stay on par with other leading DEXs (decentralised exchanges).
In October 2023, QuickSwap introduced multiple fee tiers for V3 on Polygon zkEVM and Manta Pacific that now allow LPs to distribute their funds across different price ranges in addition to the dynamic fee model (0.01%, 0.05%, 0.3%, and 1%) for higher capital efficiency and greater flexibility.
These are industry-leading contracts that give LPs more options with their liquidity and create greater efficiency across the board. Currently, this feature is only available on Polygon zkEVM and Manta Pacific - and with QuickSwap looking to deploy on several new chains over the coming months and years, having these multiple-tier V3 contracts will serve as a strong addition and value-add to attract more LPs to these networks.
QuickSwap is looking to begin implementing fees that will go to the DEX for usage of the multiple fee tier Uni V3 contracts on any current (Polygon zkEVM/Manta Pacific) and future chains, introducing another revenue source for LPs, the Dragon’s Lair, and the Foundation to increase rewards for the users/community and improve sustainability for the entire ecosystem.
The type of contracts launched will be voted on a per-chain basis. On some chains QuickSwap will launch Algebra contracts, others it will launch UniSwap V3 contracts, and on some chains the community may even launch both such as on Polygon zkEVM.
This proposal has been put forward for the QuickSwap community to decide if the fee split should be 90% for LPs, 7% for Dragon’s Lair, and 3% for the Foundation for multiple fee tier V3 contracts on the DEX, which (if agreed upon) will apply to any existing and future chains with these contracts - more information on the specific proposed breakdown can be found in section 2 below. Algebra fees will remain unchanged.
TL;DR:
- QuickSwap recently enabled multiple fee tiers for V3 on Polygon zkEVM, letting LPs on the DEX select between various price ranges that give them greater capital efficiency and more potential to earn higher rewards
- In addition, this is appealing to some funds who have mandates around using only unmodified Uni V3 contracts as in these cases Uni v3 contracts will be provided as an option for pool creators
- This results in larger revenue for both the Dragon’s Lair and QuickSwap Foundation as Algebra would not receive a cut when these contracts are used
- With the QuickSwap DEX aiming to launch on new chains, these industry-leading V3 contracts are an essential component to give LPs more incentive to deploy liquidity on these new networks while also diversifying QuickSwap’s product offerings
- This proposal is for 90% to LPs, 7% to Dragon’s Lair, and 3% to the Foundation, on fees generated from these V3 contracts on any existing and new (future) chains - see more information in the section below on the proposed breakdown
- To begin, the governance discussion on the official QuickSwap Reddit will run until Monday, January 15 at 4:00 PM UTC
- Once the Reddit discussions finish, a formal Snapshot vote will begin and run until Saturday, January 20 at 4:00 PM UTC
- Once you’ve read this entire blog post, make sure to visit the official QuickSwap Reddit discussion forum to share your perspective with your fellow community members
Multiple Fee Tiers on V3: Benefit for New Chains
As previously mentioned, deploying these V3 contracts that enable multiple fee tiers broadens the horizon for LPs on the DEX.
They also make the QuickSwap DEX more versatile when it comes to features for LPs and allow them to manually select different options for providing liquidity, also letting them earn higher potential rewards depending on their preference and risk tolerance.
It’s important to note that the fees for the Algebra dynamic fee model will remain unchanged - this proposal is specifically a vote for the community to decide what the DEX fee split should be for the specific multiple fee tier structure Uni V3 contracts that will be live on certain chains based on per-chain community votes.
Proposed Fee Split
The proposed fee split is as follows for multiple fee tier Uni V3 contracts on existing and new chains:
- 90% to LPs (liquidity providers)
- 7% to the Dragon’s Lair
- 3% to the Foundation
As mentioned in the TLDR section, this would benefit both Dragon’s Lair stakers and The QuickSwap Foundation, as both would receive larger revenue where these contracts are used than when the alternative Algebra contracts are used.
Join the Discussion
As always, QuickSwap community members are encouraged to participate in and contribute to QuickSwap governance discussions and proposals across all of QuickSwap’s online forums, especially on Reddit. As a Dragon, you are a valued community member and your opinion matters – but you have to participate in community voting procedures to make it count.
As always, critical decisions guiding QuickSwap’s strategic development will always be determined by way of decentralised governance. QuickSwap’s future is in your hands, so make your voice heard!