Enhancing LP Fees Management on xExchange

xclaudiu
Tue, 26 Mar 2024 08:09:23 +0000
General Discussions

Currently, on the xExchange platform, the fees earned by liquidity providers (LPs) are directly added to their existing LP positions, increasing the overall value but making it difficult to track profitability separately. To improve transparency and control for LPs, I propose the following enhancements:

1. Separate Fee Accrual: Instead of directly adding fees to the LP position, earned fees should be distributed separately in the form of the two tokens that make up the liquidity pool. For example, if an LP provides liquidity for WBTC-EGLD, their earned fees would be accrued as separate WBTC and EGLD balances, distinct from their primary LP tokens.

2. Fee Claiming Without LP Withdrawal: LPs should have the ability to claim their accrued fees without having to withdraw and break their entire LP position. This could be done periodically, either based on a minimum fee value threshold (e.g., $5 worth of fees) or at regular intervals (e.g., weekly).

3. Consolidated Fee Claiming: A convenient “Claim All Fees” button should be available, allowing LPs to claim all their accrued fees across multiple liquidity pools in a single transaction. This would streamline the process and provide a clear overview of total fees earned.

4. Optional $MEX Conversion: LPs should have the option to convert their claimed fees directly into the platform’s native token, $MEX. This could be achieved by using the claimed fees to purchase $MEX from the market, providing LPs with a seamless way to accrue and accumulate the platform token. The same for Fees Rewards from Energy Holders.

By implementing these enhancements, xExchange would empower LPs with greater transparency, control, and flexibility over their earned fees. The ability to separately track and claim fees would allow for more accurate profitability analysis, while the consolidated claiming process and optional $MEX conversion would introduce convenience and potential incentives for LPs to engage more deeply with the platform’s ecosystem.

These changes would not only improve the user experience for LPs but could also foster increased liquidity provision and stronger alignment with the platform’s goals, creating a more robust and attractive environment for market makers and traders alike.

5 posts - 2 participants