BIP 60. Migrate Curve Setts to Convex, Fee Changes.

Category: Sett strategy, Fees

Scope: Sett strategies for renBTC, sBTC, tBTC, ETH/WBTC SLP, Fee Structure

Status: Rejected: Snapshot


  • Migrate renBTC, sBTC, tBTC Setts to Convex with a new strategy
  • Change the Standard Fee Structure from 20% Performance + 0.50% Withdrawal to 30% Performance + 0.20% Withdrawal.
  • Establish the same strategy and fees on Sushi ETH/WBTC SLP Sett
  • Reduce byWBTC withdrawal fee to 0.20%
  • Establish 10% Performance and 0.10% withdrawal fees on Helper Vaults.


BadgerDAO is preparing to migrate our Curve Setts to Convex and launch five new vaults there.

This migration comes with new strategies that imply accumulating interest-bearing Convex tokens by the DAO and distributing these tokens to users as rewards.

This migration and the switch to the new fee structure need to be vetted by the BadgerDAO governance.

Three BIPs are going to be published in preparation for the Convex Setts Launch:

  1. Curve Setts Migration Approval, Strategy changes, and Fee Structure changes
  2. 12 Week Liquidity Mining Program
  3. Badger Boost Power-UP


Curve Sett Migration

The primary reason to migrate our Curve Setts to Convex is simple: to boost their underlying APYs.

Convex allows to increase CRV rewards to the vaults and provides CVX tokens on top of that.

With this migration and new vaults launch, we would like to switch to a more symbiotic behavior towards the Curve and Convex ecosystem.

The strategy is to distribute most of the tokens to users, accumulate the tokens in the treasury, and only sell a small part for Bitcoin. The details are available in the article.

We believe that this approach will be more beneficial for Badger, Convex, Curve, our users - and Bitcoin in DeFi, as it will allow it to have higher liquidity over the long term.

Migrate Curve Setts to Convex, approve the Convex Setts strategy
  • Yes
  • No

0 voters

The Fee Changes

0.50% withdrawal fees have been the primary source of income for the DAO and account for the absolute majority of its Sett revenue.

The withdrawal fees have been performing great within the circumstances of market volatility and the gradual emission reduction.

On Curve Setts, the 0.50% withdrawal fee outperformed the 2% management fee structure by the magnitude of about 1.6x.

Besides being profitable, withdrawal fees provide an extra layer of security against economic exploits and allow different clusters of users (active yield seekers and long-term holders) to pay at different rates.

For example, a user who deposited Bitcoin into a Sett to hold it there for two years would still only pay 0.50%, while with a 2% management fee structure they would have to pay 4%, or 8x more over the same period.

Still, the community has expressed the sentiment that the 0.50% fees are high and that it would be more welcome if the DAO took a larger cut from what it earns for users instead of taxing the principal either by management or withdrawal fees.

Previously, the underlying APYs on our Curve Setts were not allowing the DAO to be cost-efficient without a high withdrawal fee.

However, with Convex Setts Launch, those APYs will increase, allowing us to switch to a new fee model with 30% performance and 0.20% withdrawal fees without losing out on cost efficiency.

A 0.20% withdrawal fee is lower than what users pay for a token swap on DEXes, so it shouldn’t be considered high, while it would still serve as a security layer and a source of BTC income for the DAO.

Switching to lower fees will allow users to move capital more freely and have an easier time covering the costs on their principal in the lower APY environment that is generally typical for BTC.

This change will also reduce the total cost of redeeming ibBTC from 0.60% to 0.30%, making the total cost of going in and out from WBTC to ibBTC 0.50%, which is three times lower than what it was a couple of weeks ago.


Approve the change of the Standard Fee Structure from 20% Performance + 0.50% Withdrawal to 30% Performance + 0.20% Withdrawal and implement it on Convex Setts
  • Yes
  • No

0 voters


On the byWBTC Sett BadgerDAO can only reduce the withdrawal fee on its own, so the vote will only affect that:

Reduce byWBTC withdrawal fees to 0.20%
  • Yes
  • No

0 voters


As Sushi ETH/WBTC Sett is similar to the Convex vaults, it makes sense to consider adopting both the fee structure and the new underlying strategy for the Sett.
The fee change can go live on the Convex Launch date, the strategy would need to be developed and tested, so would take more time.
I propose no change on the other Sushi Vaults at the time, as they are directly related to BadgerDAO’s tokens and thus perhaps require a different treatment.

Change ETH/WBTC SLP Fees to 30% Performance + 0.20% Withdrawal and implement the same strategy as on Convex Setts regarding the rewards.
  • Yes
  • No
  • Only change the fees, and keep the strategy as is

0 voters

Helper Vaults Fees

Badger Convex Sett users will receive interest-bearing Convex tokens as a reward:

For these vaults, the suggested fees are 0.10% withdrawal and 10% performance.

There is an intention to increase Bitcoin yields on Curve and Convex by voting with the CVX tokens from the vault once the Convex governance goes live.

Introducing a small fee and moderate incentives to these vaults will allow:

  • for the DAO to accumulate more Convex tokens
  • for Badger users to have a way to earn more Badger with their yield while supporting the ecosystem
  • to invite Convex and cvxCRV token holders to be a part of the BadgerDAO community
Establish 10% performance and 0.10% withdrawal fees on the CVX and cvxCRV Helper Vaults
  • Yes
  • No

0 voters


If approved by the Governance, the changes to the fee structure will be implemented on Convex Launch.

If the Sushi ETH/WBTC Sett strategy change is voted in, that would require additional development, testing, review and deploy steps, so that part of the BIP would take more time to implement.

Can someone address the need to raise performance fees to 30%. I see that withdraw fees are reduced, however, I think that large holder may forgo a 30% fee and implement the strategy on their own. 20% performance feels like a fair tradeoff.


In general I am super excited about the migration to Convex as it is much more efficient and comes with a lot of advantages. Win-win-win. Voting FOR on that.

However raising performance fees to 30% is too much in my opinion, the industry standard is 20% and that is more than fair.

I believe that if we are already hearing voices in Discord that the fees are very high, implementing this would only make them worse.

I’d much rather keep the 0.50% withdrawal fee which I think is reasonable. I would also implement a functionality that could WAIVE this fee if the user just wants to move from one Sett to another or move / bridge and use a Sett in a different chain (I know this is not simple to implement, would require development and might not be worth it, but it is an idea or possibility for the future).

1 Like

Completely agree with your comment. 20% is fair and it is also the standard (even in traditional finance - hedge funds). 30% seems way to much in my honest opinion and could backfire. I’d much rather keep the withdrawal fee which at least discourages shorter term behavior.

This is why I voted against in that particular question, but I think I am the only one at least as of now.

lol yes convex is gucci already use them lol

lol wtf fee structure convex already charges 16% and you want to increase from 20% to 30% on top lol people complaining about fees and you want to increase fees wtf lol this is very bad and I will personally leave badger if this is implemented lol perhaps after incentives proposed in the other BIP are over lol

@premie @cryptomooniac

A 2% management + 20% performance fee is a standard in TradFi, but in TradFi you don’t get rewarded with tokens for using the products.

The net fees BadgerDAO users are paying now are much less than 20% performance and 0.50% withdrawals, if we take into account Badger rewards.

In the same manner, if we switch to 30% performance and 0.20% withdrawal fees - and implement a power-up to the Badger Boost, the fees will be net negative for a large percentage of Badger and DIGG holders. A lot of users will earn multitudes more than what they pay in fees.

Imagine using a fee-free product on a 100k deposit if you own 1k worth of Badger & DIGG, a small fee product if you own $500 worth, and a fee-negative product if you own 2k worth.

I get that. However, emissions are an incentive for using the product. They are not infinite and will eventually end.

It is very important to clarify that the 20% performance fee in TradFi is applicable only to the profits that exceed a certain benchmark. This fee is used as a “reward” for fund managers if they outperform the market: they get a share of the excess profits generated. If they don’t outperform, they don’t get any performance fee, they only get their 2% management fee.

This is not the case in crypto for obvious reasons. The crypto world is very different and the models should be also different.

In crypto, I do believe that a 20% cut for the DAO is very fair and it is also quite standard in the crypto industry.

I still think that 30% is too much, even if it gets “compensated” via emissions and by a reduction on the withdrawal fee.

Emissions can be infinite, they can’t be infinite at the same rate, it has to be decreasing.

If we ever turn off the incentivization, that should come with a fee reduction.
The same should be applicable when we launch unincentivized vaults.

In crypto, 30% is also a standard when it comes to incentivized liquidity.
Harvest, Bunny, and Adamant all have it, and it seems to be working well for them.

2% management fee is a standard in TradFI, but it doesn’t make much sense at all in our circumstances.
Bitcoin yield tends to be on the lower side in general.

A vault with 3% APY and a 2+20 fee doesn’t make much sense, as you would pay most of your profit in fees.
The same vault with 3% APY + 30% performance would mean that you would be getting 2.1% base APY instead of 0.80%. And if you decided to stay in a vault for two years, you’d be paying an extra 0.10% per year. So would be having 2% APY total.

The 30% performance fee in conjunction with the DAO’s strategy to accumulate Convex tokens means that over the long term CRV and CVX emissions to Bitcoin Setts will be higher than they would be if we took a 20% performance fee.

When it comes to users, they win immediately:
a) from the higher underlying APY from migration
b) from lower withdrawal fees
c) from the effects of the Badger Boost power-up

I haven’t written the power-up BIP yet, but that change would be really impactful for Badger and DIGG holders, and this change in performance fees will be unnoticeable when you take into account the opportunities that Badger Boost will present, provided the governance approves it.

In my opinion these are 2 very different topics and should be 2 different BIPs.

1 BIP to migrate our vaults
another BIP to change our standard fees and apply it across any vaults where this is not the case, and it is possible based on partner relationships.

These are all good changes though.

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From my perspective, it could all be one BIP about the Convex launch, but that would also be indigestible.

All the changes are interconnected, hence I’ve published the two BIPs simultaneously.

The details can be adjusted, but if the governance disapproved the migration of Curve Setts to Convex, I would not propose the new fee structure or the emissions model for them.

Technically, every vote we do can be a separate BIP and a separate snapshot - and that would be the “proper” way, but that would simply be unbearable for all the parties involved.

From my perspective, it could all be one BIP about the Convex launch, but that would also be indigestible.

All the changes are interconnected, hence I’ve published the two BIPs simultaneously.

The details can be adjusted, but if the governance disapproved the migration of Curve Setts to Convex, I would not propose the new fee structure or the emissions model for them.

Technically, every vote we do can be a separate BIP and a separate snapshot - and that would be the “proper” way, but that would simply be unbearable for all the parties involved.

  • Fees are one topic that pertain to the whole system and users are quite concerned/what to feed back in about.
  • Convex launch is a tech upgrade that will make everyone more money and we should do, and the community probably more just wants to know about.
  • Emissions are a cliff that we ended up backed up against because we didn’t come up with a plan until the last minute, and is something that we need to kind of just ram through so we can try to think about it/discuss it more openly in the coming weeks.
  • How to deal with rush-jobs in governance is a question of governance process and should be thought of outside any individual decision.

By putting things together, you create the perception of situations where one thing must be approved with the other, or at least where users/voters who are concerned about a specific topic have to muddle through a much larger context to weigh in.

So yeah, IMO this should have been 4 bips, and 2-3 of them should have been posted 2-3 weeks ago. That being said, they are all well written, and if you can get another 20 votes to push them over the edge I’m excited to vote yes to almost all items listed here.

So yeah, IMO this should have been 4 bips, and 2-3 of them should have been posted 2-3 weeks ago.

This is not how it works. Thinking through stuff takes time, a lot of it.
And a lot of the moving parts are interdependent, so it is suboptimal to push one change before there’s a bigger picture available, where these parts are cohesive with each other.

Three and a half weeks ago I suggested the first strategy for Convex, which is quite different than the final version.
Since then Convex has been my main point of focus aside from the things that needed to be done more urgently, like pushing the ibBTC fee change or internal ops+comms stuff.

The date these BIPs were posted is as early as it gets, as I’ve been working overtime on it.

So the question is not whether it should have been done 2-3 weeks ago, but rather if we want to wait for another 2-3 weeks to go through all the governance processes the way you see fit.

Doing 10 BIPs, half of which are canceling each other is tiresome and unproductive, and would take more time overall.
Being a prisoner of an earlier BIP because there’s not an easy way to adjust stuff anymore is not good either.
So I believe it’s better to write a good BIP in the first place, and it is more respectful towards the governance participants’ attention too.

The overall BIP + token holder governance process takes a lot of time and effort, and that’s why I continuously try to explore options in flexible governance.

Approaching the Council about the decisions was one way of doing it, and it has had its share of criticism from the community that I can’t find unfounded.

The short notice token holder voting gets its loudest critic in yourself, but I doubt that your voice is representative of the 90%+ of the token holders.
I assume most would prefer for things to get shipped faster when considering the trade-offs between building and checking all the governance boxes, which were established somewhat arbitrarily in the first place, without a large discussion about parameters and/or the token holder vote.

None of these issues had more than 40 forum votes. Our policy is that you need at least 50, to move to snapshot, BIP’s in early may were getting close to 100 forum votes.

So. Here is what I would propose. The tokenholders who are able to notice/vote on a forum post within 24 hours are likely the ones who are very active on our discord/in our community. While these are wonderful badgers, they’re probably not our largest token holders, who are busy and don’t have a lot of time to spend trolling the badger Discord.

The fact that we’re getting 34 forum votes instead of 90 shows us that our discord is even less of a good representation of our voting public. I do not think that 30-40 Badgers that happen to notice/vote on a forum post makes a very good representation of our token holders at all.

But yes, you are right, we shall find a way to fix all this soon, and for now we just need to get these vaults launched, the fees changed, and the emissions out.

I’m very much against raising performance fees to 30% that’s crazy.
I’m an investor in some of the best funds in the world and only one of my funds charges 30% performance fees, however the net performance are better than badger inception to date (even if we were to consider badger ATH price)

I think 30% is good for badger holders, and I do own a significant amount.
However, it just seems completely unnecessary to lift the performance fees to 30% the incentives are not aligned with depositors.

I’m also a large depositor and I’ve already taken the bulk of my deposit elsewhere because badger is not competitive.
I can’t suggest other people to deposit in badger when I’m the first to not do so.


For most of the part, I agree with you.

And the fact that the fees are “more than compensated” with emissions is not sustainable, in my opinion, in the long run. But clearly the team disagrees.


In the long long run it is not sustainable, you are correct. That being said, it is sustainable for the short/medium.

The best example of this is CRV who is 1 year through a 6 year emissions schedule. That seems quite sustainable for at least a few years. In badger’s case, we just need to figure out how to get boost working right, and to capture most of the bitcoin AUM. Then we can think about how to adjust our emissions. By this point, we should have a lot more in the treasury, which will all be earning yeilds itself, so we can use some of these yields or claim to some of these yields to boost emissions and/or
the price of badger.


I completely agree with you and I’ve just voted against. I’d love to understand better what would it take to make you consider bringing your BTC back to Badger.

I think the BADGER team needs to listen to its users to make sure the product remains competitive and interesting to them rather than focus on the short term - shortsighted - interests of the BADGER holders.


I’m an investor in some of the best funds in the world and only one of my funds charges 30% performance fees

Do your funds reward you with tokens for using them, or do they just charge you the fees?

however the net performance are better than badger inception to date (even if we were to consider badger ATH price)

Does that fund manage your Bitcoin or something else? Bitcoin rates are generally on the lower side.


Focusing only on the performance fees without considering any other parts of the picture is misleading.

  1. The main misleading piece is ignoring the fact that Badger is issued towards the vaults.

For example, we could somewhat easily switch to the vaults that charge only 10% performance fees - and don’t receive any Badger for using them. Would you be interested in that over the incentivized vaults with 30% fees?

  1. None of our users would pay 30% net performance fees, similar to how they’re not paying 20% performance fees now. The net fees that users pay depend on their Badger Boost rankings, and a lot of them are paying negative fees.

  2. If we imagine that the DAO is net neutral in issuing its rewards (the amount of Badger paid is the same as the fee inflows to the DAO), then the higher fees allow for a larger impact of Badger Boost on users returns.

This, in turn, would benefit all the Badger & DIGG token holders and would allow the DAO to shift the distribution of the tokens towards users who signal that they’re interested in them.

  1. The withdrawal fees are getting reduced, so it is not a proposal to increase the fees, it is a proposal to exchange 10% performance for 0.30% withdrawal fees.

I would not propose that change without the Convex migration, as that would be quite bad for the DAO. Migrating the Setts to Convex allows for that change to be somewhat neutral.


So far the proposal is not coming to life because there are three large addresses that are blocking it.

And the largest address that is voting against the change would be one of the major beneficiaries if all the changes (fees, emissions, boost power-up) were to come to life. That is due to the fact that it stands on top of the Badger Boost rankings.

Listen to users’ feedback and make better proposals.

1 Like

Lower the fees for support from bajja