SEP-3: SOFT Fee Switch Enhancement Proposal

Author	SOFT Governance Community
Status	Proposed
Type	Governance
Network	Ethereum
Implementor	SOFT Development Team
Release	(Release Name)
Proposal	Loading status...
Created	2024-03-20

Simple Summary

The SOFT Fee Switch proposal aims to establish a variable fee mechanism for the use of SOFT protocol smart contracts. This initiative is designed to generate transaction fees and ensure sustainable growth of the SOFT ecosystem.

Abstract

We propose the implementation of a fee mechanism that activates a "Fee Switch" on SOFT Protocol smart contracts. This structure will include a tiered fee model and governance participation incentives through SOFT token staking. Fees accrued will directly support the SOFT Treasury. The deployment timeline will consider thorough testing and community consensus, aiming for a main net launch post-QA and approval.

Motivation

A sustainable revenue model is essential for the continued innovation and expansion of the SOFT ecosystem. The current lack of a revenue-generating mechanism limits the project's growth potential and long-term viability. By introducing a fee model with staking incentives and dynamic fee reductions, we can create a steady income stream while incentivizing deeper ecosystem engagement.

Specification

Overview

The Fee Switch mechanism includes a tiered fee and staking structure for projects generating significant volume, and governance voting power as a staking benefit. This approach encourages broader and more engaged participation in the SOFT ecosystem.

Rationale

The decision to implement a variable fees, along with staking incentives, is aimed at balancing transaction fees in alignment with ecosystem growth. Governance participation incentives are designed to further align the interests of SOFT users with the ecosystem's health. Transparent reporting on fee usage will ensure accountability and community trust.

Technical Specification

Fee and Staking Schedule: Outlines the relationship between SOFT staked, stake duration, applicable fees, and penalties for early withdrawal.
Governance Participation Incentives: Offers voting power for projects staking SOFT tokens, encouraging community involvement.

Test Cases

Test cases will be developed as part of the implementation phase and shared with the community for feedback.

Configurable Values (Via SCCP)

Fee percentages based on SOFT staked and stake duration.
Early withdrawal penalties.