BSIP 85: Maker order creation fee discount

[abitmore]

BSIP: 0085
Title: Maker order creation fee discount
Author: Abit More <https://github.com/abitmore>
Status: Draft
Type: Protocol
Created: 2019-10-13
Discussion: https://github.com/bitshares/bsips/issues/240
Worker: TBD

Abstract

This BSIP proposes a protocol change so that the committee can define
different fee rates for maker orders and taker orders.

Motivation

To improve liquidity of the BitShares DEX.

Rationale

The maker-taker fee model is adopted widely in centralized exchanges and
helped them to attract trading activities.

In the BitShares DEX, for each filled order, the owner of the order need to
pay an order creation fee and conditionally a market fee.
BSIP 81 described
a way to apply the maker-taker fee model to the market fee. This BSIP
describes a way to apply the maker-taker fee model to the order creation fee.

Specification

Add a new global parameter maker_fee_discount_percent which can
be updated by the committee only after the protocol upgrade.
Initial value of that parameter is 0.
Valid range of that parameter is [0, 100%].

When a limit order is filled or partially filled for the first time,
technically, when its deferred_fee field is non-zero,

• if the order is a take order, process the deferred fee as before;
• if the order is a maker order,
  • if the order creation fee was paid in BTS, return
    round_down(deferred_fee * maker_fee_discount_percent) to the owner,
    then process the remaining deferred fee as before;
  • if the order creation fee was paid in another asset, return
    round_down(deferred_paid_fee * maker_fee_discount_percent)
    to the owner, return
    round_down(deferred_fee * maker_fee_discount_percent) to
    the fee pool of the asset, then process the remaining deferred fee
    and deferred paid fee as before.

Discussion

As of writing, to incentivize market making, the limit_order_create
operation fee is very small. However, since there is only one fee,
the fee for consuming liqudity is also very small.
This BSIP gives the committee a tool to increase fee for consuming
liquidity while still keeping a low cost for market makers to provide
liquidity.

Copyright

This document is placed in the public domain.

[abitmore]

@froooze

[abitmore]

@ryanRfox I guess this BSIP can be assigned with number 84?

[ryanRfox]

Looks "done" enough to assign a BSIP number. However, I just assigned 84 for Issue #81 . Let's assign BSIP85 to this one. See PR #241 for README updates.

[abitmore]

Created PR #243.

[froooze]

@abitmore
Is it not better to use two different fees for maker and taker, instead of doing a refund for maker?

[abitmore]

@froooze technically refunding is much easier to implement and not hard to understand.

[abitmore]

Done with #243.