Resupply Redemption Fee Adjustment

Proposals
1

Overview

In preparation for the deployment of the Insurance Pool (IP) retention program and the introduction of savings reUSD (sreUSD), this proposal outlines strategic redemption fee adjustments to optimize protocol economics while maintaining user incentives and reducing friction points.

Proposed Changes

  • Increase the borrower’s share of redemption fees from 0.5% to 0.8%
  • Reduce the protocol’s share of redemption fees from 0.5% to 0.2%

Rationale

1. User Experience Enhancement

Lower redemption fees address a significant pain point for protocol users:

  • 60% reduction in redemption costs improves borrower retention
  • Reduces barriers to reUSD liquidity management

2. Strategic Positioning

These adjustments prepare the protocol for:

  • IP retention program launch
  • Long-term sustainability through improved redemption fees

3. Emission Reallocation Context

The upcoming changes to the emissions structure will redirect some of the borrowing incentives away from borrowers to the IP retention program:

  • Current borrowing emissions: 25% of total emissions
  • Proposed borrowing emissions: 18.75% of total emissions
  • 6.25% redirected to IP retention program

Expected Outcomes

For Borrowers:

  • Reduced friction when redeeming reUSD positions
  • Maintained strong incentive structures despite emission changes
  • Improved overall protocol economics

For the Protocol:

  • Balanced revenue structure across multiple fee streams
  • Enhanced user retention through reduced redemption costs
  • Preparation for upcoming feature deployments

Conclusion

This fee adjustment proposal represents a balanced approach to protocol optimization, addressing user pain points while maintaining revenue sustainability. By reducing redemption fees, we create a more user-friendly environment that supports the continued success of the protocol.

The proposed changes ensure that borrowers remain significantly incentivized for continued protocol usage while removing friction from the redemption process. This strategic adjustment positions Resupply for continued growth and user adoption in the evolving DeFi landscape.

We encourage community discussion and feedback on these proposed changes before proceeding to a formal governance vote.

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