¡Of course there are bridge fees! Everytime a user uses the Across bridge they pay a fee for the transaction.
Here is basically how it works:
- An end user pays a fee to use the protocol’s service. For example, there has been $3.4M of bridge volume today, that generated a Total Revenue for LPs of $4,407.
- What % of the fee goes to the service providers (supply-side fees)? Currently 100%. LPs earned 100% of that revenue, which gives them an estimated annualized apr of 3.3% (if TVL and daily total Revenue remains constant).
- What % of the fee goes to the protocol (revenue)? Currently 0%.
I agree it may discourage some liquidity provision and that TVL may fall 10% or 20% to $42-47.7M of TVL. But that isn´t necessarily bad! A protocol bridge should always optimize for capital efficiency. This works in a game theory way, it´s actually really fun and interesting:
-If you have a capital efficient bridge this means that you are capable of doing great amounts of volume with relatively low capital.
-This gives you the possibility to charge low fees to users (Across most of the times is the cheapest bridge that appears on aggregators), while paying out a decent yield to LPs. How?
You aggregate all of this fees that users paid to bridge, and distribute them among less capital.
-Basically, due to being capital efficient and requiring less capital the total amount of fees coming from bridge volume gets distributed among lesser capital or LPs.
The protocol switch idea kind off introduces the game theory aspect: If TVL goes down, the capital that remains inside the LPs will earn more fees and thus more apr/apy, because the same amount of fees will get distributed among lesser capital!
The only assumption we are taking here for this to be true is that the bridge is capital efficient, which makes it able to handle the same amount of volume or relatively higher quantities, and Across is designed to do that!
I quickly made a spreadsheet Protocol fee switch - Google Sheets that looks into this. If a Protocol Fee switch of 10% gets implemented and TVL goes down 10% or more, LPs that remain in the protocol will earn the same or more apr than before, because again the total amount of fees coming from bridge volume gets distributed among lesser capital or LPs. The DAO would also generate $160k (annualized) in bluechips + usdc, thus eliminating the need to sell $ACX to fund future DAO operations.
I don´t know if you are talking about the $10M investment by VCs, but that remains off-chain to fund Risk Labs operations. If you are talking about the $ACX that remains in the Treasury, this eliminates the need to pay contributors in $ACX directly and we could explore other ways like a mix of this bluechips, for example $1000 in eth + 1000 Success Tokens vested in one year.
Lastly, I think you are forgetting the fact that $ACX is currently being paid out as LM incentives on top of the estimated organic apr that LPs get. They are basically getting 2.89 to 17.85%, depending on what “pool” they are at, and how much have they been staked.
But yeah, that is not low!