How to Handle Protocol Fees in Multi-Asset

(Copying and pasting Raf’s message from Discord to the forum for easier discussion. You can find the original conversation in the #general channel in our Discord. Link here)

We have a protocol decision we need to make this week to keep the eng team unblocked

Basically, once we add multi-asset, how do we want to pay out staking fees?

Right now staking fees are paid out in tfTUSD because TUSD is the only asset on the platform

But in the future, we don’t want people to get a little tfBTC, tfETH, tfUSDC, tfTUSD, etc. because it’ll be too many tokens

Gas cost will be very high with so many tokens

So the main options we’re considering are:

  1. Sell everything for a single asset e.g. tfUSDC
  2. Sell everything for TRU

I’m leaning a bit towards selling everything for tfUSDC because I think it’s valuable for us to pay out stable coin rewards for staking TRU. If staking TRU only gets you more TRU (and not stablecoin) then it becomes more difficult to explain the utility of TRU. We’d have to say ‘the value of TRU is you can stake it and get more TRU’ (which feels to people like circular logic) vs ‘the value of TRU is you can stake it and get stablecoin’ (much simpler to understand the value)

Note: this would only impact origination fees, not TRU incentives/rewards that stakers also receive.

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As a principle I didn’t expect TrueFi proposition to be offering finance on anything other than stables, mainly USD.

Stables for a single token makes sense as all relatively “stable” and pegged so fluctuations are minimal.

Short term fix so devs can move forward, while creating the framework for multi asset.

Community can chew over what adding other assets mean for the service and how that could/should be structured, I think more volatile assets should be treated as a separate discussion so not to complicate dev work.

I’d support fees being paid out in a single stable asset and agree tfUSDC seems like the right choice :+1:

My vote is for tfUSDC, it’s fully backed and has high liquidity

OK folks, based on the discussion here and in Discord, it seems like there is rough consensus on tfUSDC. The eng team is going to proceed with development assuming we’re paying out rewards in tfUSDC.

We’ll let the community know once the smart contracts are complete and the actual upgrade is coming up.

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tfUSDC is the best solution

Personally I support sell everything for a single asset but DAI maybe a better choice than USDC as it aligns more with the decentralised feature of Defi.