[Proposal] Extend Fee Holiday for tfBILL

Author: @adapt3r

Summary:

This proposal seeks approval to extend the protocol fee holiday for the tfBILL product.

We believe a scalable, liquid, low-risk strategy like tfBILL will benefit the liquidity and success of all current and future vaults on TrueFi, and given the strategic importance, we are seeking an extension of the original 90 day fee holiday. This change will not affect existing products.

Motivation:

Adapt3r Digital, a forward-thinking asset manager, is seeking to make the tfBILL product central to the TrueFi ecosystem. In the last six months, tokenized treasury bill products have become a highly competitive space. Below is a list of the fees and fee structures of top on-chain treasury bill products on the market today:

Source: Steakhouse Financial, RWA.xyz

We believe it to be prudent to use reduced fees as one way to promote tfBILL and give the product the best chance of attracting investors in this newly competitive landscape.

As we continue developing the product, our conversations with institutional investors indicate that offering an extended fee holiday would likely attract more investment at this stage. Our current pipeline of investor conversations represent 100mm+ in medium-term TVL.

Specification and Requirements:

Waive the protocol fee for tfBILL for another 90 days.

Benefits:

Facilitates the addition of the following to the TrueFi platform:

  • Integration of the tfBILL product, making it a key piece of the TrueFi ecosystem and giving it the best chance for success.
  • At least $50MM of new investment capital.

Voting:

  • “Yes” - Extend the protocol fee holiday for another 90 days.
  • “No” - Do not change.
4 Likes

Let me start with a thank you to Adapt3r for its commitment and innovative efforts to enhance the TrueFi ecosystem, particularly with the tfBILL product.

However, to date, it doesn’t seem that the absence of protocol fees has impacted attracting new LPs. While I am not against extending the fee holiday, I am interested to learn what else we can adjust in the current strategy to better ensure TVL growth before voting to extend. At this point, it seems possible that other factors have more of an impact than fees.

2 Likes

Agreed with @kaimi that I would like to see more traction on attracting new capital to the tfBILL product.

@adapt3r - how do we convert these potential investors into actual TVL?

3 Likes

Hi @kaimi and @rafaelcosman - appreciate the thoughtful feedback on our proposal.

  • We expect $3.5mn to convert to a subcription in the next 7-10 days. This subscription is currently undergoing KYC/AML on our end and do not expect any issues here.

  • We are currently in discussions with two large asset managers (one of which is a household name) regarding a $20-50M investment. This has been a multi-month conversation and we expect these discussions to convert to a subscription in the next 30 days. Considering almost every large-scale conversation involves an entity evaluating all of their options, it is hard to see how almost doubling our fee beyond all competitors will increase our probability of success (please see table of fees in the original post).

  • We are also in discussions with 3 Layer 2 blockchains and 3 stablecoin issuers, the latter of which could easily scale to over $100M in subscriptions. Given these are also highly competitive situations where we are well-positioned, we would not advise implementing a protocol fee on these investors. In fact, Adapt3r will be scaling our fees DOWN as TVL scales up for these investors given the size of potential investment is in the 9 digit territory.

  • Finally, we would redirect the question back at the community: how would increasing the fee on the product from 0.30% to 0.50% improve our chances at success? Would the additional $20k in revenue for TrueFi materially improve the picture for TRU holders?

Given our conversations, the pattern seems to be that investors first think about fees as that is often the first question. As the discussion continues, priority items involve compliance and liquidity. From a compliance standpoint, we are very well-positioned. We would also note that we are actively working to improve the product to expand tfBILL’s moat. A few notable improvements in the pipeline:

  1. T+0 Redemption Facilities
  2. Multi-Chain Expansion
  3. Better Onboarding UX
  4. Composability and Transferability
1 Like