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Shapeshift to introduce fees on in-app Thorchain swaps

On Friday night, the DAO approved a proposal to implement fees on top of all Thorchain-based swaps executed through the ShapeShift app.

Following a Snapshot voting period, an experimental proposal seeking to enforce fees on all in-app Thorchain-based swaps has passed the penultimate ideation stage. Starting on February 15, the platform will charge a 0.1% fee on swaps, increasing the fee by 0.05% every 30 days until it reaches 0.25%.

According to the proposal, Shapeshift DAO has underperformed in the area of revenue generation. Its singular visions and business model in this regard have little “data-based evidence suggesting the sustainability of this approach given measured user growth and revenue per user.” The proposal aims to solve this bottleneck, stating that the DAO will “iterate rapidly towards finding a sustainable business model” over the next 12-18 months.

The proposed experiment is meant to determine if users value our platform enough to pay marginally more for it than a completely free option when swapping assets via Thorchain […] We have two paths to pursue aggressively; increasing MAUs and increasing revenue per user. All reasonable experiments that align with either of these paths are worth the DAO’s consideration.

It is worth mentioning that the fees may be removed if things do not go as planned. Notably, if the monthly swap volume within the first three months of adding fees to Thorchain dips by more than 50% from the January baseline, fees will be disabled without any additional governance action.

Meanwhile, all revenues generated from the newly added fees will be directed into the general treasury for the DAO.

Thorchain is a cross-chain liquidity protocol that facilitates the decentralized exchange of assets across blockchains in a non-custodial manner. Shapeshift announced an integration with the protocol in April 2021, making way for users to exchange native (unwrapped) Bitcoin for Ethereum and Litecoin for the first time.

Update: A counter-proposal to enable opt-out donations instead of fees was also approved by the DAO. It is worth clarifying that both proposal passed the penultimate stage in Shapeshift DAO's governance: Ideation. Consequently, an official proposal to decide the winning strategy is currently live on Snapshot.