DIP-8: Reduction of LP Fees for Major Stablecoin Trading Pairs


DIP-8 proposes reducing the LP portion of the trading fee for the USDC-USDT (ETH) and BUSD-USDT (BSC) trading pairs on the DODO platform to improve our competitiveness in the stablecoin trading market. This proposal includes increasing the rewards for LPs to compensate for this decrease.


DODO’s stablecoin trading fee is currently 0.01%. Because of this relatively low fee, the liquidity for stablecoin trades on DODO is very good, which gives us a competitive edge in the market. However, DODO’s price advantage in the stablecoin trading market has been challenged by the adjustment of the Balancer DAI/USDC/USDT pool’s trading fee to 0.01% and the addition of a pool with a 0.01% swap fee to Uniswap v3.


We propose to adjust two stablecoin trading pairs on the Ether and BSC networks, namely USDC-USDT (ETH) and BUSD-USDT (BSC), by reducing the LP portion of the trading fee to 0 for these two pools, with the other portions of the fee for these pairs remaining unchanged.

Ever since the DIP-3 proposal was passed, 80% of the trading fee was allocated to the liquidity provider (LP), 15% was used to buy back DODOs and distribute them to vDODO holders in the form of vDODOs, and 5% was used to establish a community treasury.

If this DIP-8 proposal is passed, then for the USDC-USDT (ETH) and BUSD-USDT (BSC) pools, the fee will be reduced to 0.002%, of which 75% will be used to buy back DODOs and distribute them to vDODO holders in the form of vDODOs, and 25% will be used for the community treasury.

Since the LPs of both pools will no longer receive a portion of the trading fees, DIP-8 proposes to compensate the LPs by increasing the DODO token rewards for both pairs to cover the LPs’ reduction in fee revenue. Specifically, the token rewards for both pools will be increased by 10%, as follows:

  • The USDC-USDT (ETH) rewards will be increased from 2 DODO per block (1 DODO for USDC and USDT respectively) to 2.2 DODO per block.

  • The BUSD-USDT (BSC) rewards will be increased from 0.4 DODO per block (0.2 DODO for BUSD and USDT, respectively) to 0.44 DODO per block.


  • Lowering the stablecoin trading fees could improve DODO’s competitiveness in the stablecoin trading market, and could allow us to gain more trading volume, bring in more users, and potentially attract more whales and professional traders - making DODO the best place for stablecoin trading.

  • LPs on USDC-USDT (ETH) and BUSD-USDT (BSC) will not receive revenue from trading fees, but they will receive more revenue from DODO tokens through the compensation plan and overall revenue will exceed what it was before fees were reduced.

  • Fee income and equity will remain the same for both the platform and vDODO. Increased liquidity will lead to increased trading volume and therefore higher dividends for vDODO holders.


  • Approve

  • Reject


Link: Snapshot

Voting Period: Dec 10, 2021 at 1:00 PM to Dec 14, 2021 1:00 PM SGT

Voting Method: Users with both DODO tokens and vDODO tokens can vote via Snapshot. 1 DODO represents 1 vote and 1 vDODO represents 100 votes. Casting votes will not incur any gas fee.

Vote for the proposal by clicking on the option that you agree with the most. Feel free to post your thoughts and alternative proposals to DODO’s community forum.

If the total number of votes reaches at least 2 million, the DODO Team will implement the proposal using the option that receives the most votes.

Note: If you have DODO tokens, make sure that they are in wallets on Ethereum mainnet (wallets on centralized exchanges or Binance Smart Chain will not give you votes).

From the on-chain data, most stablecoin LPs are farming and dumping their DODO. This amplifies during market corrections when more stablecoin LPs are looking for yields. Based on this proposal, we will be perpetuating additional selling pressure on DODO tokens from farming and dumping. Maybe a better solution would be to work towards getting a Tokemak reactor and voting to direct liquidity towards Dodo. Increasing DODO rewards for stablecoin LPs is going to have a negative effect on the value of DODO for current token holders through increased selling pressure.

Happy to listen to other takes on this.

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I think this is good advice, yeah, we will slow the release of tokens in a number of ways

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Great. Any thoughts on how to go about this? My thought would be maybe to reward some or all of the Dodo rewards to stablecoin LPs in the form of vDODO. This would either encourage longer term holding or would provide vDODO holders with a hedge against any farming and dumping via distribution of exit fee and burning. The burning of tokens from exit fee would theoretically be beneficial for both vDODO holders and LPs since the LPs future rewards would be from a more scarce overall supply. Could be more incentive to continue to keep liquidity there too as a more sustainable mechanism.