Here is an idea. Why not track the amount of revenue being generated per day by the fees and have the fees be somewhat dynamic based on the profitability and revenue of the DAC?
Good idea. But we should talk about the starting point. Remember that the current trading fee is based on the dev teams arbitrary decision. We should listen to many traders and bot makers as well.
I basically agree with you that we must have profitability. My approach is to attract more users first with lower fee and make profit later.
Our service is obviously superior that centralized exchanges. But what traders really care is money (profit surely), which is a function of liquidity and trading costs.
1) There might not be a later. The DAC should take profit whenever profit is available and should not wait until a later which might not come.
We need to determine a metric or set of metrics which can track. We can track profitability from these metrics. For example the daily burn rate would tell us something, top 10 most popular transaction types would tell us something, the most popular asset of the day with the amount of revenue it generated for the network would tell us something. Without these statistics we don't have quality data from which to make decisions and are literally shooting in the dark. So if you want the most effective possible fee structure you need the highest quality data possible so as to produce and over time optimize the fee structure.
2) Traders should be able to profit but should not profit at the expense of the Bitshares DAC. The relationship between traders and the DAC has to be mutually beneficial, symbiotic. The DAC also has to profit and maybe the DAC can attract people by giving people ways to make money by doing stuff other than trading. The referral program is a critical example of this and many of the people making money from referrals will be the people who will now have money to trade with, and I doubt they'd complain about the fees.
Professional crypto-traders aren't the heart of an economy. They simply make money through trading money they already have. Make ways for people to earn fee vouchers, rewards, points, credits, etc. Let the exchanges have token lotteries, be creative about how people can make a profit other than trading, and the fees no longer are an issue. The fees only are an issue to people who want to make bots but who don't want to do anything other than trade, which is kind of strange because if they have a lot of money to start with then the fees aren't a big deal and lifetime membership is cheap, but if they don't then they must want to trade fractions of a penny?
The fee should adjust dynamically. For example it may be possible to use a genetic algorithm to have the fees adapt to the usage patterns of the participants. The dynamic fee structure could then be trained from the statistics and evolve to fit the demographics without violating any privacy. As long as the statistics are anonymous, you could overlay this on top of Bitshares eventually to all who choose to participate in providing the statistics, which would be information like how many of a certain kind of trades are being done, or which kind of transactions generate the most or least revenue for the DAC.
Features which are valued a lot by participants could train the genetic algorithm but of course this would take a bit of effort to implement. There are simpler ways to create the dynamically adjusting smart fee mechanism.
An easier version would be to simply use a metric, and to adjust the fee on a daily basis. On hours where profitability is high for the DAC the fees could dynamically adjust. Bytemaster may be onto something with that but in general if the fee difficulty adjusts according to the actual usage patterns of Bitshares then you'd have real time adjustable fees. During the times of great profitability the bots could jump in on the low fee hours, but during times of low profitability, the fees should increase just as the difficulty in Bitcoin increases when a lot of people mine it.
The concept of difficulty applied to fees might be a way to make a sort of dynamic smart fee mechanism so that fees adjust themselves according to usage. Usage statistics could be added later so that in the backend the Bitshares DAC could know exactly how we like to use it, and then evolve.
Topic: Let's Lower Trading Fee (Read 10153 times)
