I would like to draw your attention to an important matter concerning fee structures and their potential implications when accessing ParaSwap through third-party integrators. Specifically, I want to address instances where users may unknowingly fall victim to unfair transactions and excessive fees due to a lack of awareness or transparency on the part of these integrators.
In my recent experience with Furucombo, I encountered a discrepancy between the fee terminology used on their platform and the ParaSwap Fee Structure - ParaSwap User Doc. While ParaSwap allows integrators to charge a fee on swaps, with ParaSwap receiving 15% of this fee by default, Furucombo refers to this fee as an “initial fund.”
This difference in terminology raises concerns about the accuracy and transparency of the information presented to users on Furucombo. Additionally, I personally suffered a loss of $83, which I believe can be attributed to this discrepancy.
Please share your thoughts, experiences, and suggestions in this forum thread. Your valuable insights and contributions will play a vital role in shaping a more transparent and user-centric landscape for ParaSwap API integrations.
hey albist but What I intend to address in this forum topic is as follows:
In the fee structure document, it is stated that:
“If the partner swap fee is equal to or above 0.5%, ParaSwap leaves 100% of positive slippage to be used as best suited to the partner’s interest.”
In my opinion, this provision leads to intentional or unintentional misuse of ParaSwap’s customers. It means that if a partner causes more than one percent of the transaction to be deducted as a fee from the customer’s account, then 100% of that fee goes to the fee recipient’s account, and the partner can withdraw that amount.
In other words, ParaSwap knowingly or unknowingly encourages partners to charge customers more than one percent of the transaction as a fee, and what benefit does this increase in fees bring to ParaSwap?
Why should ParaSwap offer a good deal to partners to empty customers’ pockets if they manage to deduct more than one percent of the transaction in any way? I wonder if this fee exceeding one percent, like my transaction of $83 out of a $1,000 transaction, which is 8.3 percent, could be seen as a kind of small money laundering.
Moreover, I want to indulge a bit and ask why ParaSwap doesn’t profit from fees exceeding one percent. Does it have a specific intention if the fee structure is designed to generate income? Then why should ParaSwap give up on that?
On the other hand, when I see ParaSwap’s name in forums, it increases my trust that the work is being done properly. However, with this fee structure, I see that it’s not the case. Apparently, there are always ways to bypass customers and collect unfair fees from them.
I believe these fees should be automatically and transparently accessible to customers and the ParaSwap DAO on-chain. ParaSwap should inform its partners that if they don’t clearly specify these fees on their website and engage in customer misuse, we will terminate our services to them because ParaSwap is influenced by this.
first of all, there might be an update you missed on the fee structure brought by PSP-IPΔ32.
I don’t think the user doc is up to date. Currently checking on this.
But FYI, the 0.5% minimum fee rule was removed. So I guess it answer your main accusations.
If that’s what led you to say (wrongly) that ParaSwap was pushing the protocol to take a “higher” fee, it doesn’t exist anymore. But that doesn’t change the fundamental points of disagreement we have.
When you use a partner (let say X) that itself integrates ParaSwap, you are a user of X.
As explained in the ParaSwap doc: "Third-party services, such as wallets, can easily integrate with ParaSwap using the API. They can control the fee structure of their integration with the revenue-sharing smart contract.
It’s not a problem, it’s a feature to allow partner to be as flexible as possible while using ParaSwap, and it’s what makes of ParaSwap a tool in high demand.
ParaSwap does not encourage, it gives the partner a choice. Again, this is a feature. Partner can charge a fee on the swaps they facilitate if they choose to. By default, ParaSwap takes 15% of this fee.
As you already said, and as you found information on ParaSwap documentation easily, ParaSwap documentation is very clear on its fee structure and nothing is hidden.
Above all, I think that anyone who uses a protocol should find out about its conditions of use.
In this case, if you use protocol X (which integrates ParaSwap), it’s a smart idea to find out about the potential fees that protocol X would apply.
For example, it took me literally 2 minutes to find the fees announced by Furucombo in its documentation.
If these fees seem incorrect, the best solution is to contact them directly.
In my opinion, ParaSwap’s governance is not intended to tell the protocols that integrate ParaSwap how to act. In fact, I don’t think it’s within its remit or capacity to do so.
Partner’s fee is a feature. Clearly displayed in the ParaSwap doc, which contributes to the DAO’s revenues.
Some protocols take fees, that’s their business model and that’s why they may have fewer users, or not.
However, it is the responsibility of the users of these partners to inform themselves before using them.
The ParaSwap product must be adapted to as many people as possible and the ParaSwap DAO has no business influencing the protocol’s users/partners.
And as a reminder, ParaSwap’s Website Fee = 0
Please do not use the governance forums as an alternative place to air grievances of your experience with partner protocols. I have already explained to you both twice before in the previous governance forums as well as over three private communications the relevant user documentation, as well as how the issue you experienced is not related to ParaSwap API.
Personally, it would’ve been more productive for you to reply to my last clarification where I answered these questions as opposed to opening another thread on the same matter.
As explained twice before privately, neither the API nor the DAO have any control on the user documentation of Furucombo nor any other integration. If you have concerns about the accuracy and transparency of the information presented to users on Furucombo, this is not the place to communicate that, you should do this on the Furucombo-specific channels.
With this clarification in mind, as well as @Albist thorough explanation on the current fee structure, I do not see any productive way for this thread to advance, so closing this for now. If you have suggestions that are relevant to the DAO, feel free to DM me or discuss them in our governance Discord before publishing them here, and thanks once more for your dedication to improving ParaSwap!