Can we adjust the mint's fee to adjust premium?

Can we decrease the mint’s fee or give mir token as rewards for minting high premium assets like BABA、DOT…
and increase the mint’s fee for minting negative premium assets like KO VIXY…?

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There is no additional fee (above Terra TX fee) for minting, there’s just a 1.5% cut of collateral taken by Mirror when you CLOSE your short or borrowed position (so when you “un-mint” the asset).

Building on your thought:
Let the 1.5% be spread to either the opening or closing based on current premium. Maybe even have it be a variable percent with a minimum of 0.5% and Max 5%?

Ex. If at a discount of 10%, let a 5% fee be levied on anyone’s mAsset minted who decides to open a short position at that time. Closing costs only 0.5%

If at a 10% premium, it costs only 0.5% to open a CDP, 5% tod close it.

In such a case some of these earnings could be diverted to a treasury that helps arb premiums.

I think increasing the borrowing fee would lead to an increased premium as the extra cost would have to be passed onto buyers.

Yeah I think we need to prioritize incentivizing minting and selling to meet the demand that exists for the mAssets. Alternatively, we can always remove incentives for purchasing the mAssets but that goes against the ethos of a growing protocol. I agree that some sort of variable minting rate depending on premium seems at least reasonable to consider. Not sure if and how it could be abused though…

If the premium on an mAsset is 20% and the minting fee is lowered from 1.5% to 0.5% then the premium might theoretically fall from 20% to 19%. Unless there are some psychological reasons that would cause the premium to fall lower but I don’t think so.

Not exactly, if you want to just speculate on decline of a stock intraday or in few days, you may expect about 3-5% move sometimes. Is it worth to enter the risk when 1.5% minting fee consumes half of expected profit? Not really. So the fee is discouraging whole group of users from using mAssets for short term trading.

But yes, the fee has probably much lower influence than rewards and collateral ratio.

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You’re right. I think the problem is that the minting/borrowing fee on Mirror is not proportional to time like on traditional platforms. A one-time 1.5% fee is low for positions held for months but the same fee is probably too high for daytrading.

Yes, the fee is discouraging whole group of users from using mAssets for short term trading, but it is also discouraging whole group of users from short minting.