Over the last month, a number of third-parties have asked us to create a resilient, long-term fee structure for xUSD transactions on the Haven network.
We’ve agreed to do so and the reason is clear: in order for xUSD to be used regularly by millions of people, on the largest platforms in the world, we must implement a solution that ensures fees paid by users are flexible and transparent.
So, the first announcement we’re making today during Haven’s multi-week “Announcement Season” is the Haven 2.0 Fee Structure. These fees are designed to thwart economic attacks and manipulation attempts, while maintaining Haven’s stable storage use case and long-standing promise that “1 xUSD will always be redeemable for $1 worth of XHV”.
Today we are sharing details of a more refined fee structure that will be self-sustaining and fair to all users as Haven’s network grows. Most importantly, this structure will be less attractive to anyone wishing to negatively impact Haven’s network functions and economic stability.
The Haven 2.0 Fee Structure will be implemented soon on Haven’s mainnet via a hard fork to be announced at a later date. Haven’s xUSD fee structure will continue to be iterative moving forward based on the network’s growth and health.
Details of the updated fee structure are as follows:
xUSD exchange unlock times will be: 6 hours, 48 hours, 120 hours (5 days), and 240 hours (10 days).
A standard base fee, based on transaction weight, will be included for every xUSD exchange. This is identical to all transactions (such as transfers) performed on the Haven network.
A conversion fee will be charged based on the selected unlock time and the difference in spot and moving average (24 hours) price of XHV. Each conversion fee will include 0.2% of the value exchanged, multiplied by the priority number of the unlock time from the table below, plus the following:
- 6 hour exchanges will pay 110% of the spot/MA difference plus 5% of the value exchanged as a speed fee. However, if the funds used as inputs are more than 30 days old, a reduced 2% speed fee will apply.
- 48 hour exchanges will pay 100% of the spot/MA difference plus 2% of the value exchanged as a speed fee. However, if the funds used as inputs are more than 30 days old, a reduced 0.8% speed fee will apply.
- 120 hour exchanges will pay 75% of the spot/MA difference. No speed fee will be charged.
- 240 hour exchanges will pay 25% of the spot/MA delta. No speed fee will be charged.
Finally, since the purpose of the Haven Vault is stable storage, short term trading will be discouraged via a separate speculation fee:
- 6 hour xUSD to XHV exchanges: If the Vault inputs used are less than 24 hours old, 50% of the XHV profit made on those inputs will be charged as a speculation fee, 40% if less than 48 hours old, and 10% if less than 120 hours old.
- 48 hour xUSD to XHV exchanges: If the Vault inputs used are less than 120hrs old a 10% speculation fee will be charged.
- 120 and 240 hour exchanges: no speculation fee will be charged.
In summary, the total fee paid for any xUSD exchange will be made up of the following: Base fee + conversion fee + speed fee (if applicable) + speculation fee (if applicable).
As always, xUSD exchange fees will be automatically calculated and previewed for users in their Vault before transaction confirmation.
By implementing this model of varying fees based on unlock priority, the cost of any exchange based manipulation effort increases to such an extent that it no longer makes financial sense for a bad actor, while still ensuring users operating as good actors in the system can retain their desired full value from xUSD exchanges by opting for longer unlock times.
Finally, after the full suite of Haven’s private xAssets are released, a mechanism to provide trading fee credits will be implemented. These fee credits will be applied to wallets which utilize offshore trading functions (xAsset -> xAsset) and will not be transferable between wallets.
For example, when a user makes a trade between xUSD and xCNY, a small (~0.1%) trading fee will apply. 50% of that fee will then be credited to that user’s wallet as fee credits to be used only for moving between xUSD and XHV (on and offshore). Fee credits will therefore allow users of offshore trading and storage to reduce or remove onshore and offshore fees for their individual wallets.
We look forward to implementing this updated fee structure in the near future to ensure anyone in the world, on platforms large and small, can use Haven’s xUSD with confidence and ease.
Note: special thanks to Haven community member DougieWatts for suggesting a fee mechanism based on the age of Vault inputs to encourage xUSD storage on the network.