Giving Swap Fees to Governance Control

Hello everyone,

I hope you are enjoying the new beta UI! For those who do not know me, I used to be a Pangolin intern, and I have recently joined the team as a Solidity dev. Today, I want to share with you what we intend to do to further decentralize Pangolin.

We’re planning to make a new governance proposal to move swap fees from multisig control to governance control.

Currently, for every swap made there is a small fee that goes to our multisig. We then use the accumulated fees to buyback PNG and fund the PNG staking contract. This is a centrally-managed and trust-based process. It is also not very efficient.

To trustlessly manage the swap fees, we have deployed a new contract called FeeCollector. This contract allows anyone to convert accumulated swap fees to PNG, and send it to PNG staking contract. In return, the caller receives a small percentage of PNG to cover their gas fees. We also plan to set treasury percentage to 15%, which will go to Pangolin DAO. This treasury percentage can only be changed by a governance proposal, hence the title of this post. We plan to make a single proposal to make FeeCollector contract the swap fee recipient, and to change treasury percentage variable of FeeCollector to 15%.

If you want to learn more about the architecture of FeeCollector, you can check the diagram below. What do you think about this potential upcoming improvement to how swap fees are handled? Share your thoughts here!

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Really important topic this and would love to hear back from the community

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More decentralisation is great. Can you expand on the effects of this change in regards to the exchange tokenomics.

(FYI Diagram is 404, and other link doesn’t work)

Fixed the links, thanks.

Tokenomics-wise the change is small. It’s just that this method ensures the Staking contract is more efficiently funded, hence it would offer a more consistent APR. Also we would not have to worry about APR occasionally dropping to zero due to not funding the Staking contract on time.

One important change would be the option to divert some PNG from MiniChefV2 to PNG staking contract. This would increase APRs for PNG stakers. FeeCollector is designed to manage a such diversion of PNG from MiniChefV2 to Staking contract.

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