Implement Affiliate Fee (aka Referral fee)

Hi,

To incentivize apps and wallets integrations, I suggest adding a referral fee mechanism. Such that devs who have a wallet product or web app, are incentivized to integrate mirror. More integration means more trades and more fees for LPs and more profit and growth of mirror ecosystem.

The fee can be charged on top of the swap and network fee or it can be a share of existing swap fee. Also there are many ways to do that. e.g. fixed dollar value, fixed percentage value, profit share percentage, …

Many other protocols have implemented such features. Examples are 1inch (What is the 'referral program' and how does it work? | 1inch.exchange - Help Center) and ThorChain (Affiliate Fees on THORChain. Incentivising a wave of competitive… | by THORChain | THORChain | Mar, 2021 | Medium) and Serum (anchor/lib.rs at a1464d14d56c5e2b924bb43acccb90cb7b5244e2 · project-serum/anchor · GitHub)

I like the thorchain method which leaves the fee setting in the hands of developer, and the developer can charge up to max of 10% of transaction value. Also the fee is charged on top of the normal fee(LPs keep their original fee)

From developers’ perspective, this is good since I have more options. e.g. charge active members less fees. or cap fees up to certain dollar value, dont charge fee for new users for 1 month, etc…

From the users’ perspective, if the app/wallet rips off the user(e.g. 10% for each trade), he/she will notice and will not use that app anymore. So the competition prevents the ripoff.

Thanks for reading. Gib support? :smiley:

1 Like

Ok I just checked and looks like mAssets LP pairs are terraswap pairs. So probably a trade(swap) referral fee should be implemented in terraswap smart contracts.

It is also possible that wallet developers implement their own fee mechanism. But it would be easier for them if the mechanism was already implemented.

Architecture - mirror
When new mAssets are whitelisted, Mirror Protocol will create the following contract instances:

  • Terraswap CW20 Token for the new mAsset
  • Terraswap Pair for the new mAsset against UST
  • Terraswap CW20 Token for the new mAsset’s LP Token

Hi,
Any risk to lure only bounty killers and not the popular apps & wallets?
Most dev will intergrate if Mirror gains tractions and offers a good DX, imho.
BR

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Hi.
In almost all cases, referral fee is not a subsidy. Its either sharing in the existing fee or an additional fee charged on top. So even if you self refer yourself or your alt accounts/wallets, it would not be profitable and cannot be exploited. E.g. imagine you trade 100$ and pay 3$ fee, but 1$ goes back to referrer which could be yourself. you still down 2$ so its not profitable in anyway to exploit.

And on your second argument:
Its the other way around. Mirror gains traction if many apps integrate it, not the other way. Its in the interest of the protocols to integrate in as many places as they can. E.g. if mirror could port very fast to solana, it could gain the synthetics market share in the solana ecosystem. Similar logic applies to other places. E.g. if we incentivize wallet devs to integrate mirror, they don’t look other places to bring in synths to their app/dapp.
And people respond to incentives. What prevents a dev from integrating a copycat of mirror or anchor which is built on solana and gain fees instead of integrating mirror/anchor? Does he has an incentive to behave otherwise?

Ofcourse good DX/UX attracts users. But incentivizing integrations pushes it forward a lot harder.