pls allow me to share more - we basically had various hypothesis and tested them out
H1: how the withdrawal fee, yield fee or VSP fee affect TVL in the pool?
Turns out, the R-squared analysis on pool APY vs each fee type found that only a moderate amount of the variance in fees can be explained by the APY. That means APY is important but actually less important than what we thought so initially.
However, when comparing R-squared analysis of APY with and without VSP tokens, there is a significant difference. E.g. 0.2802 with VSP and 0.0369 without VSP (!). That is a huge difference. Hence, in the treasury management, we focused on increasing the runway of VSP, since it is 0.28 points more impactful to have VSP
H2: can we just reduce the withdrawal fee to 0%?
We found that 93% of protocol fees have come from withdrawals rather than yield.
This indicates that the withdrawal fee should not be dropped too drastically in order to retain enough revenue to cover the operations/marketing budget requirements. That’s why we need to keep the withdrawal fee. Now, what about the intra pool transfers? We noted that 3.6% of capital and 10.2% of users are withdrawing and depositing to a new pool in the same day - this is based on same wallet address within a 24h period. It is reasonable to deduce the behaviours of users this way, to understand the “intra-pool” transfer.
Lowered withdrawal fee for pool swaps should increase retention to the ecosystem, withdrawal fees currently disincentivize switching pools. That’s why we need to maintain those numbers - both from quantitative and qualitative perspective.
A higher expectation of the portion of users paying full withdrawal fees does improve revenue projections. With greater buffer for hitting operations budget target, there is more room for lowering pool transfer fee (after seeing real impact of this change at 0.3%).
H3: Tell me more about the competitors
One thing in our analysis is to measure if people are leaving VSP for other similar protocols. Well, it’s quite a mixed bag on TVL comparison of the competitors.
H4: However, are people leaving VSP for better APY elsewhere?
There is a very small correlation. one could argue that the other protocols are attracting capital, but the data is not significant enough to conclusively state that. Also see #3 for that.
H5: As for new capital entering the space, is it entering just VSP or other competitors?
Again, it is a mixed bag. The protocols all hold various tokens, and TVL analysis might seem like a good correlation, but the individual assets might vary a lot so it is hard to be conclusive. However, we can see that there is a general positive correlation of assets entering this asset management defi segment. A general positive correlation of all the TVL growth in the space