Fair fees: A dynamic formula for balancing dapp value creation/capture
AI summary of the linked articleKevin Owocki and Devansh Mehta propose a dynamic fee formula for individual dapps to balance builder incentives against excessive extraction. It is not a proposal to change protocol-layer economics. Builders receive the larger of sqrt(1000 × N) and 1% of N, where N is the amount projects get, so the fee is proportionally higher for small pools. For a $170,000 pool, the square-root fee is $13,038.40, and the rate becomes a flat 1% once funding exceeds $10 million. The authors suggest pilots at Gitcoin Grants round GG24 and Deep Funding, and consider directing 10-25% of the overhead to the mechanism's own dependencies. |
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1 comment mishaSubmitter We propose a sustainable fee structure for individual apps to bake into their economic model that addresses a fundamental tension: builders need financial incentives to create and maintain these systems, but excessive fees undermine their effectiveness. Our approach provides higher proportional returns for smaller funding flows while gradually decreasing to a minimal percentage for larger ones, ensuring both sustainability and fairness across the entire ecosystem of public and private goods funding. |
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