The Stabull Team is proposing changing the LP/Protocol split from 70/30 to 50/50. The vote is at Snapshot with 5 days for discussion, ahead of a 3 day voting period.
Summary
This proposal updates the swap fee split between liquidity providers (LPs) and the protocol from 70% LP / 30% protocol to 50% LP / 50% protocol. The goal is to improve protocol sustainability while maintaining meaningful fee income for LPs.
Motivation
The current fee split was set during early testing and was never formally defined in the whitepaper. At the time, trading volume was expected to be low and LP rewards were expected to come mainly from token emissions.
Since launch, usage has changed. Trading volume (see https://dune.com/stabull_finance/dashboard) now comes from aggregators, programmatic traders, and multiple execution paths, and swap fees are now a meaningful source of value.
At the same time, the project did not raise meaningful capital through its IEO or subsequent CEX listings. The protocol therefore needs to rely on its own revenue to fund development, infrastructure, and operations.
The current split does not capture enough value for the protocol to be sustainable.
Proposal
Governance approves updating the swap fee split as follows:
Current**:** 70% to liquidity providers | 30% to the protocol
Proposed**:** 50% to liquidity providers | 50% to the protocol
This change applies globally across the protocol.
It only affects how fees are distributed. It does not change the fee charged to traders or any other protocol parameters.
Rationale
The original fee split was designed for a low-volume, early-stage environment.
The protocol now has consistent trading activity, and swap fees represent real economic value. Increasing the protocol share allows that value to fund ongoing development and operations.
While LP yields may decrease in some pools, this change improves the protocol’s ability to remain operational and continue supporting those pools.
Governance is the appropriate mechanism because fee allocation is a core economic parameter of the protocol.
Expected Impact
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LPs continue to earn swap fees, but their share reduces from 70% to 50%
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Some pools may see lower LP yields
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Protocol revenue increases significantly
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Improved long-term sustainability of the protocol
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Trade-off: lower LP share vs stronger protocol viability.
Out of Scope
This proposal does not change:
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asset listings
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execution logic
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oracle configuration
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operational control
It also does not change:
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swap fee levels charged to traders
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liquidity mining programs
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fee bands for different asset types or maturities (to be addressed separately)
Risks
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Reduced LP yields may make some pools less attractive
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Potential short-term liquidity adjustments as LPs react
These risks are balanced by the need to ensure the protocol remains financially sustainable.
Implementation
If approved, the fee split will be updated to 50/50 across the protocol.
Implementation will be applied at the protocol configuration level.
Review
Governance may review the fee split in the future as trading volume, pool composition, and protocol economics evolve.