I would not be against a smaller fee that was a percentage or something like that of the tx, but I don’t want to punish smaller txs more. It sounds like this is not an available feature, yet, anyway, so it doesn’t matter for now.
I’m also not necessarily against a small flat fee and I don’t mind the fee being larger in one direction (to incentivize keeping the rETH on Ronin, if it does that even). This is partly because this is Ronin. I might be less for this on, for example, Arbitrum, but I don’t mind experimenting with Ronin/Avalanche etc.
Even if it does not bring in a lot of money, I think it’s not bad to at least try this out. Maybe ETH → Ronin $1, Ronin → ETH $2 or so.
Possibly, depending on requirements.
I would like to see at least some pDAO ownership in a structured way. I’m aware of the potential problems surrounding this however at some point there will need to be some means for the dao to hold possession of funds be they from fees,referrals, grants etc.
pDAO would certainly have to approve the members. Beyond that, I’ve pushed legal structure talk that would enable the pDAO to do things like this but it went nowhere. I’m not sure there is much appetite (and there are some who are very opposed) to the DAO forming a legal entity. I would love to see it, though.
I’d prefer to see the team take ownership of the contract to help minimize legal exposure. If they’re not willing to do that, I’d like to hear a clear explanation of their concerns. I’m uneasy with the current trajectory—where members feel pressured to commit, only to later regret it once they better understand the legal implications. I witnessed this happen during the last GMC election.
That’s fair so I will try to outline our concerns here.
Firstly, I want to define what “take ownership of the contract” means. From the discussion so far it means having the ability to whitelist addresses, as minters, to support the adding / removing of bridge operators. If there are different expectations then let me know? AFAIK CCIPs ability to implement a dynamic fee structure is not contingent on us owning the token - but I will check.
Our concerns are threefold:
Trust - we have dedicated ourselves to eliminating areas of trust. By giving the team the ability to whitelist minters, the pDAO would be giving the team the ability to infinitely (or close to) mint rETH. We could obviously implement safeguards but these would have to be high enough to meet market demand and low enough to prevent abuse.
Risk - by taking on this responsibility, the team take on a large amount of risk. We would obviously hold a high standard but if those keys ever got exploited in someway - it would be game over for us and potentially rETH.
Legal - we face the same risk as the DAO. By holding unilateral control over elements of the protocol we open ourselves up to legal risk.
This is why we would prefer to not retain ownership of the token contract. It comes down to a trade off: future optionality vs large risk exposure. I don’t like losing optionality but, to me, we have to make the trade off.
Those are certainly legitimate concerns. I don’t know enough about this, but are there ways to only control certain aspects? I’m pretty sure @SSJ2_Spartan thought that we could control the fee by owning the contract (or if we burned the contract, Chainlink would set the fee). Maybe we can just control the fee but nothing else?
That’s correct, the DAO can burn admin rights for burning and minting rETH while still earning fees on bridging (this is option 2 in the forum voting). However, if the DAO does not own the contract address (CA) and rely on Chainlink to collect and distribute fees, we’re essentially trusting them to act in the DAO’s best interests.
By owning the CA, the Rocket Pool DAO gains the ability to vote on which bridges can mint and burn rETH. This is important because it allows the DAO to ensure that its interests are protected and it can adapt to changing circumstances.
For example, if Chainlink were to decide not to pay the DAO its fees, the DAO could vote to revoke their right to burn and mint rETH and instead partner with an alternative bridge that aligns with the DAOs interest.
We would probably still prefer to not retain ownership but we are open to joining a group with community members to own the contract - this would alleviate most of the concerns and avoid the trade off.
This is a similar scenario to the pDAO security council (which I should post about in governance), so perhaps the same people on the security council can be in this group.
Essentially, if we can form that group of elected volunteers then retaining ownership is possible. Although, I am aware DAO members have similar legal concerns. If we can’t put the group together then we don’t have much choice but to renounce ownership.
Yes, that makes sense to me. I am completely okay with a set up of team and community members. As long as we make sure people joining are aware of what they are getting into (especially from the US side).
I know I’m late catching up on all of this and providing input… Could I get help clarifying the current state of things/please correct me if my understanding is wrong here?
It seems we have a few tiers of options:
DAO somehow owns the contract address, which retains full rights (and risks) of minting/burning rETH on Ronin (which bridges have that ability)
Admin rights are burned, CCIP manages an adjustable fee on behalf of the DAO (this minimizes risks for minting/burning rETH, but we have to trust CCIP sets fee according to our requests, starts out at flat fee structure but could be changed to something like tiered in the future)
Admin rights are burned, the DAO opts out of charging any additional fees by requesting CCIP to set the fee to zero. (I think in this case CCIP still manages the fee so the DAO could stlil request the fee be changed in the future if we want?)
At this point I just wanted to highlight I think by far the most impactful thing in this conversation is Ronin planning to mint rETH (and help potentially generate demand for organic rETH minting with a campaign on Ronin) at a time when this is desperately needed. From that perspective I think it is critical to not delay/stall things further by indecision on the fees, or complexity of establishing a way to manage the contract address
Unfortunately I don’t think the DAO is currently set up in a way to responsibly manage the contract address, and my personal vote would be the risks outweigh the benefits (even if we did have something like the Security Council already setup which could expand it’s scope to help with something like this). It’s possible that maintaining the contract address actually kills some demand in that users become less likely to bridge if they know their funds are entirely secured by a multi-sig of DAO members/team/whatever combo we come up with. Perhaps in the future we could come up with a better solution for this type of scenario but for now I would be against option 1. I recognize this leaves us at the whims of CCIP, but Chainlink is well established/trusted from a user perspective in crypto - and I think this is a reasonable tradeoff of using an alt-L1 like Ronin vs staying more native within the Ethereum ecosystem.
Evaluating option 2 vs 3… I think either way between these two options CCIP still manages the fees so we have optionality here and are not locked in to anything (assuming this based on how you phrased the fact they would have to start out with a flat fee and could change to something more complex like tiered down the road). To this end, I would propose we start out with no fee (at least initially and for some period of time) to help evaluate organic demand without barriers/fees, and later implement something like the tiered fee structure once ready
It could be something like “no fees for the first x months”
This may also help incentivize activity as a trigger event to bridge before fees.
I think you already said the only option at first is a flat fee… I would expect this is worst of all options (complex/tiered fee vs flat fee vs no fee), since it provides the least income (see Val’s example calculations (Rocket Pool Bridge Campaign - #9 by Valdorff), and hurts the smaller users the most which potentially dampens overall activity as there may then be less users overall (smaller users may avoid bridging).
It would be nice to see organic activity first without a fee, and then see how that activity changes (if at all) once a tiered fee structure is implemented down the road. This would be useful data for the DAO to evaluate how to set fees on other chains since we will have a before and after comparison on the same chain, instead of evaluating different options on different chains and have to guess how much did the fee impact things vs the chain impact things.
If activity looks anything like other L2’s (Val’s chart as an example below) there will be a large boost initially (mostly from Ronin minting themselves) which likely doesn’t earn the DAO that much since they will be large mints with a flat fee… and then hopefully a continuous slope upward if activity continues organically (ideal scenario would be we add a small well structured fee down the road and it doesn’t impact activity at all but also provides a new source of continuous revenue for the DAO).
If it turns out our fee kills activity, we can always roll back / remove the fee - and ideally activity resumes back at its original pace.
Overall I like the idea of experimenting with the fees, but I also think right now we should be focusing on how to make rETH as attractive and useful as possible since that is our bottle neck… So starting out with no fee aligns better with our current goals (and ethos), but we have optionality down the road to revisit and implement something small as necessary.
we have to trust CCIP sets fee according to our requests
That is the case regardless. Also, they collect and periodically send rewards. The thing we lose is that we can’t say “we are dissatisfied and will switch” (because trust was broken or whatever).
It would be nice to see organic activity first without a fee, and then see how that activity changes (if at all) once a tiered fee structure is implemented
I would warn that sample size of 1 and a dynamic market give us an extremely limited lens. I suspect we’ll only be able to see massive impacts (eg, if small transfer go from 1000 per week to 5 per week), and other stuff will be too uncertain.
That is the case regardless. Also, they collect and periodically send rewards. The thing we lose is that we can’t say “we are dissatisfied and will switch” (because trust was broken or whatever).
Right, this was the main point I was getting at… basically this is going to be true whether we do a fee or no fee, and the only way to “be dissatisfied and switch” is if we find a way for the DAO to maintain ownership of the contract address through a multi-sig of some kind right?
So to me the contract ownership is the big question - which I think the answer should be DAO does not own due to the risks, and the lack of existing structure for it (and delay / potential loss of opportunity or complication it would add to establish). The fee vs no fee question doesn’t seem nearly as important to me, since it is flexible to change anyways.
I would warn that sample size of 1 and a dynamic market give us an extremely limited lens. I suspect we’ll only be able to see massive impacts (eg, if small transfer go from 1000 per week to 5 per week), and other stuff will be too uncertain
I agree it’s always hard to evaluate root cause when you have multiple variables. I think it’s even more noisy though if we start comparing chains and fees instead of just one chain and different fees. Also if enabling the fee has no measurable impact on the activity (no more distinguishable than noise), then that is a good indicator that maybe the fee is a good decision since it didn’t impact activity in observable way.
Overall I’d summarize my stance in that my order of preference is:
Complex/well structured fee
No fee
Flat fee
From that perspective I would prefer to do 2 first in the short term and then 1 (instead of the proposal from @SSJ2_Spartan to do 3 first and then 1).
