# Proposal: Dynamic Surcharge Pricing for Fees on withdrawals over a changing amount **URL:** \ **Category:** Other Products (Labs)\ **Created:** [1 November 2020 16:17 UTC](https://gov.yearn.fi/t/proposal-dynamic-surcharge-pricing-for-fees-on-withdrawals-over-a-changing-amount/7431 "2020-11-01T16:17:58Z")\ **Posts on this page:** 13\ **Page:** 1
**Author:** ![sambacha](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/sambacha/32/1802_2.png) [@sambacha](https://gov.yearn.fi/u/sambacha)\ **Post date:** [1 November 2020 16:17 UTC](https://gov.yearn.fi/t/proposal-dynamic-surcharge-pricing-for-fees-on-withdrawals-over-a-changing-amount/7431/1 "2020-11-01T16:17:58Z")
# Testudo et Lepus ![barlowtortoisehare_400](https://europe1.discourse-cdn.com/flex013/uploads/yearn/original/2X/b/bdf0f1fb4203a0febe43f1811111e219dd6ad4a0.jpeg) [Of the Hare, and the Tortoise.](https://quod.lib.umich.edu/e/eebo/A26506.0001.001/1:5.2.119?rgn=div3;view=fulltext) > Note: Testudo more formally refers to [a roman military formation](https://en.wikipedia.org/wiki/Testudo_formation), and not to the creatures belonging to the _testudine_ family. The phrasing is entirely intentional, as the testudo formation was in fact both a defensive and offensive posture, which this _could be_. ## TL;DR: - enable dynamically adjusting fees so that only fees are imposed market dumps, rugpulls, bulge bracket transactions, etc. - vast majority of users will not pay fees, as planned with V2 - this sets yEarn apart: fees are a race to the bottom, what then? - short sellers have an additional price imposed upon them - this current implementation redistributes fee’s from transfers to holders - contracts deployed on rinkeby and undergoing testing - full whitepaper here: [GitHub - sambacha/evo-whitepaper: EVO Protocol Whitepaper](https://github.com/sambacha/evo-whitepaper) - no need for ‘token’, just implement the contract library (evo-\* prefix can be whatever, eg.g. ‘yy-\*’ - [read a friendlier version here, on HackMD, as discourse does not support LaTeX or im too lazy to format it, w.e](https://hackmd.io/@sbacha/evoprotocol) ## Abstract Utilize ‘Fees’ as a method of disincentivizing short positions and dumps by dynamically changing ‘fee’ rate, where the fee rate is _zero_ for those transfers **below** the trailing transfer average rate. This means that transfer’s exceeding the combined average transfer rate would have a fee imposed. The vast majority of users would not incur this fee or could simply wait between ‘epochs’/‘time periods’ to withdraw \*_feeless_. ## Potential Implementation as a component either to high risk assets (to enable price protection against dumping) as a module for vaults in general (this would require more extensive testing) as an optional component with user opt-in as a module for ‘yUSD’ (or some variation, e.g. yyUSD) so that additional stablecoins (i.e. yet to be proven) may be included ## Introduction **[You can’t use ‘macro parameter character #’ in math mode so I just took screenshots of the LaTeX ☹]** We propose a crypto-derived functional asset in which controllable volumetric functions are embedded within the operational utility of the asset. As a result this function exhibits desirable properties as a _unit of account_ for its underlying asset. In essence by utilizing the _acceleration_ and _deceleration_ (i.e. **velocity** ) that the speed of the ERC20 token transfers (e.g. average transaction rate/mean transaction rate) can help to _counter-balance_ and reduce the market price volatility of the faster base currency ($ETH). Our focus is on purely-virtual crypto currencies, which are based on computational assets e.g. as BTC, which is based on “mining”, or ETH, which is based on computational “GAS”. By utilizing small volume movements and disincentivizing the larger ones without compensation to holders every exceeding unusual trade of the token is tracked by the smart contract and higher “interest” fees are applied (re: withdraw, or ‘consumption’). Transference of funds _below_ daily volume threshold does not impose any interest fee. When the threshold has been exceeded some percentage of tokens gets burned, for the transfer, for deposit or for withdraw of the base instrument (ETH). Thresholds are tracked individually per address as the average rate and have a function by which they operate on. ‘evo-’ tokens are minted and burned **on-demand** by deposit and withdraw operations directly via the contract. > Think of ‘evo-’ as a prefix/marker: much like ‘aDai’ or ‘cDai’, and of course, ‘yDai’ ## Initiated Protocol Operations - Deposit - Withdraw - Transfer These **operations** contribute to the _transfer rates_. Transfer rates are tracked both **in aggregate **and** individually** (i.e. _per address_). The _period_ of time for tracking is the last `25 days` **EVO Protocol** is determined both in aggregate (dynamically) and individually for each address based on transactional (i.e. volumetric transactional information) stored and updated through the smart contract during the previous transactions. All three operations such as deposit, withdraw and transfer can equally contribute to the transfer rates that are tracked totally and individually(as per holder) by the smart contract for the period of the last 25 days.The token price is determined dynamically(and individually for each holder) based on the information stored or updated in the smart contract during previous transactions: {equation.EVO Protocol} P\_{t+1}(h, a):=\sqrt{\frac{D\_{t}}{S\_{t}}}+I\_{t+1}^{\prime}(h, a) The above equation will compute the price for a holder $$h$$ to purchase a certain amount of `EVO` tokens in exchange for a base deposit in `ETH/WETH` at the given discrete time - $$t +1$$ , where $$Dt$$ stands for the deposit of `ETH` in the smart contract at previous time - point and $$St$$ stands for the total supply of `EVO` tokens so far. The first component with the token - base ratio $$Dt/St$$ under the square root is the _indicative price_ and **does not depend on the purchase/transferred** amount, `$a$.` Ergo, the component $$I\_{t+1}^{\prime}(h, a)$$ is called the _discounted interest rate_ and it can grow _proportionally_ to a within a range of $$[0, 0.24]$$ of `$$a$$.` Higher interest payouts can slow down, **deaccelerate** , the price movement. Interest rate determines how fast, or **accleration** , such price can change depending on the market demand & supply pressure for EVO-based tokens. Interest[#] is computed individually for each EVO holder. _Note_ that all interest payments are contributed to the same common deposit `Dt` on the smart contract, which is supporting the indicative price. This means that interest is shared by all holders that _choose not to trade their tokens_ at the moment. An ERC20 smart contract will contain the information about the balance of every address, ##### Address Information (i.e. wallets) $$B(h) s.t. Bt + 1(h, a): = Bt(h) + a$$. In addition to the individual balances, EVO Protocol contract keeps track about how much each holder has transferred in the last epoch (i.e. 25days) ##### Total average transfer rate for an address $$avg(Rt + 1(h, a)): = avg(Rt(h)) + a$$ ##### Total average daily transfer rate for all holders $$avg(R¯ t + 1(h, a)): = avg(R¯t(h)) + a$$. ### Calculations More formally calculation of the individual interest rate as well as the applied ownership discount can be described in following steps: ![Screen Shot 2020-11-02 at 5.11.21 PM](https://europe1.discourse-cdn.com/flex013/uploads/yearn/original/2X/9/927bc3fb43d56c649ad6ca0650f52e971460877e.jpeg) ![Screen Shot 2020-11-02 at 5.12.06 PM](https://europe1.discourse-cdn.com/flex013/uploads/yearn/original/2X/3/35b950607711bb19fd55aac67caa6079c58fe4d6.png) Therefore it can be expected that the demand for EVO Protocol based tokens like EVO Protocol will be able to represent the _demand_ for the value storage, whereas EVO Protocol represents the value of storage as a derivative function of the underlying asset, Ethereum (i.e. gwei, or as a fixed unit of account for contracting) ---
**Author:** ![MFP](https://avatars.discourse-cdn.com/v4/letter/m/e47774/32.png) [@MFP](https://gov.yearn.fi/u/MFP)\ **Post date:** [1 November 2020 18:18 UTC](https://gov.yearn.fi/t/proposal-dynamic-surcharge-pricing-for-fees-on-withdrawals-over-a-changing-amount/7431/2 "2020-11-01T18:18:12Z")
I am still digesting this proposal, but as someone who is weary of most proposals to increase fees, this is precisely the type of proposal I could get behind. ---
**Author:** ![sambacha](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/sambacha/32/1802_2.png) [@sambacha](https://gov.yearn.fi/u/sambacha)\ **Post date:** [2 November 2020 01:56 UTC](https://gov.yearn.fi/t/proposal-dynamic-surcharge-pricing-for-fees-on-withdrawals-over-a-changing-amount/7431/3 "2020-11-02T01:56:41Z")
I will add some simulations, etc, and do a historical analysis to approximate the time periods that are optimal. This is not increasing fees: this is placing fees into two categories: which types of transactions should incur fees and out of that subset of transactions, which should incur a fee You pay a penalty for withdrawing out of a CD for example or a 401k. ## better yet, think of this as Uber Surcharge pricing on fees but for withdrawals over a certain amount that dynamically adjusts (just like surcharge pricing) I will fix the LaTeX now that the glorious admins have enabled it on the forums. Sam ---
**Author:** ![Bengii](https://avatars.discourse-cdn.com/v4/letter/b/76d3ee/32.png) [@Bengii](https://gov.yearn.fi/u/Bengii)\ **Post date:** [4 November 2020 19:15 UTC](https://gov.yearn.fi/t/proposal-dynamic-surcharge-pricing-for-fees-on-withdrawals-over-a-changing-amount/7431/4 "2020-11-04T19:15:54Z")
I think this type of complex proposal flies in the face of simple, composable, financial building blocks that IMHO is a fundamental founding principle for DiFi ---
**Author:** ![dudesahn](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/dudesahn/32/4350_2.png) [@dudesahn](https://gov.yearn.fi/u/dudesahn)\ **Post date:** [4 November 2020 19:32 UTC](https://gov.yearn.fi/t/proposal-dynamic-surcharge-pricing-for-fees-on-withdrawals-over-a-changing-amount/7431/5 "2020-11-04T19:32:21Z")
I think this is an interesting idea, but yeah, it would really be great if we could see backtested data of what something like this would look like on one of the vaults. I’m sure I’m not the only one whose math skills aren’t quite up to parsing out the equation 😅. Also, am I understanding correctly that if a yVault were seeing massive deposits, it might also see fees charged to those who are depositing? How is this beneficial? I’m sure you’ve thought of this, and I’m curious what the answer is. ---
**Author:** ![sambacha](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/sambacha/32/1802_2.png) [@sambacha](https://gov.yearn.fi/u/sambacha)\ **Post date:** [27 December 2020 13:50 UTC](https://gov.yearn.fi/t/proposal-dynamic-surcharge-pricing-for-fees-on-withdrawals-over-a-changing-amount/7431/6 "2020-12-27T13:50:21Z")
You can see an implementation here: [https://forum.makerdao.com/t/mip-embedded-volumetric-optionality-middleware-stablecoin-as-a-service/5805](https://forum.makerdao.com/t/mip-embedded-volumetric-optionality-middleware-stablecoin-as-a-service/5805) Now that v2 is almost live, this proposal can be discussed once v2 is proven robust and stable. ---
**Author:** ![Beepidibop](https://avatars.discourse-cdn.com/v4/letter/b/ce7236/32.png) [@Beepidibop](https://gov.yearn.fi/u/Beepidibop)\ **Post date:** [28 December 2020 09:35 UTC](https://gov.yearn.fi/t/proposal-dynamic-surcharge-pricing-for-fees-on-withdrawals-over-a-changing-amount/7431/7 "2020-12-28T09:35:46Z")
I might be a bit slow, but I’m not sure what this is being proposed on. yTokens aren’t speculative assets and are only worth as much as what’s in the vaults, so I’m not sure what the benefits of implementing a price stabilizing protocol are. Moreover, I thought V2 was forgoing withdrawal fees. Unless this is being proposed as a way of bringing more volatile tokens into vault strategies, I’m not sure if this will help yearn. However, I’m afraid it’s gameable if yearn’s the only one using evo-tokens. Ex. An Evo-ETH is created with ETH deposits. (Evo-ETH \<-\> ETH) yearn implements a DAI strategy that does this: DAI -\> Evo-ETH -\> some profit generating cycle -\> more Evo-ETH -\> DAI profit If yearn’s the only one using Evo-ETH, people could dump ETH (and not Evo-ETH) and eventually Evo-ETH will go down as well, bringing the new Evo-ETH strategy with it. I hope I’m just not understanding this correctly. ---
**Author:** ![Pablo-Avarez](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/pablo-avarez/32/2774_2.png) [@Pablo-Avarez](https://gov.yearn.fi/u/Pablo-Avarez)\ **Post date:** [31 December 2020 01:13 UTC](https://gov.yearn.fi/t/proposal-dynamic-surcharge-pricing-for-fees-on-withdrawals-over-a-changing-amount/7431/8 "2020-12-31T01:13:29Z")
Hola @sambacha Can you launch your product in any dex (uniswap 1inch suchi , ect) with an incubator and audit ? It can be a small amount. Do you need incubator/accelerator ? **DM me** if you’re interested. ---
**Author:** ![Martin-Watson](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/martin-watson/32/2779_2.png) [@Martin-Watson](https://gov.yearn.fi/u/Martin-Watson)\ **Post date:** [31 December 2020 02:12 UTC](https://gov.yearn.fi/t/proposal-dynamic-surcharge-pricing-for-fees-on-withdrawals-over-a-changing-amount/7431/9 "2020-12-31T02:12:18Z")
Same here, Sam Trustswap/DDIM for successful launchpad Please @sambacha if you have a medium and (ELI5) version of it. Agree with Pablo. The market is more sensitive to an audited projects (meaning more value). We can launch without and figure it out on the road and having it later. (Your brand ©℗® ™, protected, Private sales, IDO, or fair launch, hybrid, solo or team project with others or related ecosystems, promo or not the full or half packages, your call) ---
**Author:** ![sambacha](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/sambacha/32/1802_2.png) [@sambacha](https://gov.yearn.fi/u/sambacha)\ **Post date:** [4 February 2021 09:04 UTC](https://gov.yearn.fi/t/proposal-dynamic-surcharge-pricing-for-fees-on-withdrawals-over-a-changing-amount/7431/10 "2021-02-04T09:04:09Z")
Just an update on this, after doing more extensive testing, there are some edge cases for trades utilizing Uniswap. [Uniswap V2 Audit Report](https://uniswap.org/audit.html#orgd15839d) A modified Uniswap Router fix is being developed ---
**Author:** ![bOLT](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/bolt/32/3344_2.png) [@bOLT](https://gov.yearn.fi/u/bOLT)\ **Post date:** [28 February 2021 19:57 UTC](https://gov.yearn.fi/t/proposal-dynamic-surcharge-pricing-for-fees-on-withdrawals-over-a-changing-amount/7431/11 "2021-02-28T19:57:54Z")
The new routers are in prod. ---
**Author:** ![McBase](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/mcbase/32/3759_2.png) [@McBase](https://gov.yearn.fi/u/McBase)\ **Post date:** [28 February 2021 23:24 UTC](https://gov.yearn.fi/t/proposal-dynamic-surcharge-pricing-for-fees-on-withdrawals-over-a-changing-amount/7431/12 "2021-02-28T23:24:26Z")
![image](https://europe1.discourse-cdn.com/flex013/uploads/yearn/original/2X/0/0a00d76ad4b22d636b12d0b060d92a1906c06573.jpeg) ![image](https://europe1.discourse-cdn.com/flex013/uploads/yearn/original/2X/8/84f61aaff00cd8bfdc44f163b56dbbed802d70b1.jpeg) had acquired billion USD for such a short time proves to me that the greed of crypto investors is constantly growing and the fear is decreasing. Risk takers and speculative investors have taken the crypto markets again and I expect some price corrections to happen in both ethereum(which price is obviously artificially pumped) and other coins(maybe including Bitcoin). Anyway,pretty funny meme.I wonder how the Bitcoin project Chad dev looks like? ---
**Author:** ![Dark](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/dark/32/307_2.png) [@Dark](https://gov.yearn.fi/u/Dark)\ **Post date:** [12 March 2021 09:00 UTC](https://gov.yearn.fi/t/proposal-dynamic-surcharge-pricing-for-fees-on-withdrawals-over-a-changing-amount/7431/15 "2021-03-12T09:00:44Z")