[GIP-25] Remove Withdrawal Fee
AI summary
This proposal suggests removing the 1% withdrawal fee currently applied to liquidity pools in the Gearbox protocol. The fee was initially implemented as a temporary measure to stabilize borrow rates during the early stages of V2, when pool sizes were small. Now that the protocol has matured, the fee is considered unnecessary and an inconvenience for liquidity providers.
If this proposal passes, liquidity providers will no longer pay a 1% fee when withdrawing their funds from Gearbox pools, potentially increasing their net returns. The protocol will lose a minor, unsustainable revenue source, but it aims to align with user expectations and improve the user experience for LPs.
Voting results
🐳 Whale votes
0 votes > 5% VPFull proposal
Motivation
Remove the 1% withdrawal fee on the pools side.
Summary
The concept of a withdrawal fee was never supposed to stay for long, it was only there to prevent fluctuations during the first weeks of usage. Fluctuations refer to the fact when pools only have $2-4M and large withdrawals can shift borrow rates up-down too much. That was an inconvenience. Not anymore.
While this is in no way sticky liquidity, everyone is entering pools under assumption 1 that the fee won’t be there. Therefore, a fe…