SCCP-192: Futures - Lower min keeper fee from 20 sUSD to 5.

Author	Arthur
Status	Implemented
Type	Governance
Network	Optimism
Implementor	TBD
Release	TBD
Proposal	Loading status...
Created	2022-05-02

Simple Summary

MinKeeperFee should be lowered to make smaller next-price profitable when executed by a keeper.

Abstract

MinKeeperFee is used for two purposes:

It's the minimal fee paid for a liquidation to a keeper (for small positions).
It's the constant fee paid to a keeper for executing a next-price order. The fee is withheld from the user when submitting the order.

This means that small next-price orders aren't viable when executed by keepers (because of the imposed fixed fee).

Motivation

Please see more details about next-price fees in SIP-80 https://sips.synthetix.io/sips/sip-80/#next-price-orders-and-fees

Next price fee considerations

When a user submits a next price order, a keeper fee and a commitment fee are withheld. The keeper fee is a constant.

When executing an order, if the executing account is the same as the submitting account - the keeper fee is refunded. If the execution is by a different account - the fee is paid to that account (assumed to be a keeper).

This means that if executed by keeper, this fixed fee is an additional fee imposed on the trade.

Currently, at 20 sUSD, and for a difference of 10 bps in next-price vs. spot fees, it would mean that the minimal order that would make sense to be submitted is of 20 / 0.001 = 20000 size. And any smaller order would not make economical sense if executed by a keeper.

Furthermore, even with a UI and a user willing to "save" the fee by executing themselves, a keeper may still beat the user to the execution.

Reducing the fee to 5 sUSD would still be more than enough to pay for the gas costs on L2, but would reduce the size of the orders that can benefit from this flow to 5000 (assuming next-price fee difference of 10 bps).

Liquidation fees considerations

There should be no impact on liquidations, since most of the incentive is the proportional fee, and 5 sUSD would still be more than enough for covering gas costs.