Lower Spreads, Fewer Fees, Same SW DAO — Why Polygon ASAP
Better User Experience, Less Money Burned & Even Better Performing Products
No one wants to burn $73,000 in 6 weeks — but our founding team did. We have spent $73,300.47 harvesting yield and rebalancing assets within our TokenSets products along with 2 dividend distribution events.
Beginning in Q2 these expenses will be passed on to the SW DAO Treasury along with all other expenses. Let’s not beat around the bush. This is a lot of money, and we cannot sustainably continue to pay these fees without harvesting significant performance and management fees from the users of our products.
Luckily there’s a solution
Rolling out our core SWYF and SWAP products onto Polygon, and every new product thereafter, directly to Polygon.
With ~400,000 daily active addresses on Polygon there is a clear and well-defined userbase that understands that the ETH base layer fees are not user friendly, nor manageable for daily active use. You must be a whale or execute swaps that return outsized alpha, in order to recoup your burned fees. As a project who seeks to provide the same access to investment products to both Whales and Shrimps, we are ignoring our mission should we continue to use the ETH mainnet for our core products.
Previous Words from Our Community on ETH Fees
We have heard from our community that paying $50-$150 fees to trade into SWAP/SWYF or to cash out their USDC dividends is making them cringe. We acknowledge that pain as we experience it too and we are seeking to fix this issue for all of us. Since discussions as early as August, the community has been looking forward to Polygon and BSC integration. Now, before we ramp up our product line and move these expenses onto our DAO Treasury, is the best time to make the move.
On Thursday, January 13th we will roll out SW Alpha Portfolio and SW Yield Fund on Polygon via TokenSets. These products will have the exact same strategy as the ones initially deployed on the ETH mainnet, with major improvements to user experience and strategy execution.
Benefits:
- Near-zero client transaction fees to buy/sell our products
- Faster execution to gain/remove asset exposure within the Strategy
- Less MEV frontrunning — meaning better price execution on trades
- Yield farming claim fees will be greatly reduced, broadening our investment horizon
Anecdotally, we had to selectively ignore Yield Farming Index Coop’s GMI product because the fee to deploy was ~$10,000. Due to these large fees on the ETH mainnet our Yield Fund has to selectively ignore opportunities that we believe may wind up being incredibly fruitful to the performance of our products. These opportunities will be opened up to us once we deploy SWYF on Polygon.
How Will This Effect You?
- SW DAO will continue to run SWAP/SWYF on ETH mainnet until all SWAP/SWYF investors have bridged to Polygon SWAP/SWYF (ideally by Feb 1)
- If you are currently invested in SWAP/SWYF on the ETH mainnet we will pay for you to move to Polygon SWAP/SWYF (more info coming soon)
If you are currently holding SWAP/SWYF you will soon be able to send your SWAP/SWYF tokens to the DAO Treasury ETH mainnet address. We will then refund your transaction fees and bridge your new SWAP/SWYF tokens to Polygon for you, then send you back the same $ amount of SWAP/SWYF to your Polygon wallet. More information about this will be released soon in a separate announcement post.
Over the Coming Weeks
We will be asking the community how we should approach the continued integration of SW DAO to Polygon. Discussion on this topic will include moving our dividend payments solely to Polygon, providing SWD/SWAP/SWYF liquidity on Polygon via Balancer pools, and the bridging of ETH mainnet SWD to Polygon for proper interaction with our SWDAO.org dApp.
The founding team has decided we will pay out of pocket to bridge all current SWD token holders to Polygon should the time come. Ideally, we would like to begin payment of dividends on Polygon for the March dividend (paid April 1), and make the bridge a requirement for SWD holders for the April dividend (paid May 1).
The movement of SWD token to Polygon would mean the removal of the 100 SWD token dividend hurdle, opening the dividend up to many more active governance participants. Additionally, being on Polygon would mean that reinvesting your dividend to SWD tokens or our tokenized products would cost near-zero in exchange fees. We believe these two things address the vocal concerns of existing community and governance members.
We would love to hear from the community regarding the Polygon integration with SW DAO and we will be releasing more information about SWAP/SWYF token bridging reimbursement soon.
Get Involved
- Join the community on Discord by clicking here
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- Check out our website
