TribalDex just introduced a transaction fee structure of 0.25% per transaction in order to incentivise liquidity in the available pools. At a first sight you might wonder how a fee can be providing more earnings for both Liquidity Providers and also Traders. And the secret of achieving that is the liquidity depth which close the gap between buy and sell order with a very small slippage.
Having the transaction fee of 0.25% rewarded to Liquidity Providers it means that now more users are incentivised to participate and stay into the pool. Let's not forget that beside this they can earn also through LP rewards and Daily bonus which accumulates as long as the position in the pool is kept. The result of more liquidity is that the gap between the BUY and SELL is as low as possible.
Now traders come to place and they do their swap and even if they pay the transaction fee, because the slippage is very small they can get a better price compared to the case when there wouldn't be enough liquidity and the price impact could hit 5-10% even. Thus we get into a WIN - WIN situation between Liquidity Providers and Traders.
While this is theory at the moment we need to see how this plays out in reality. The idea is good and provable in the DeFi industry so let's see how that works on Hive blockchain as well.
That win-win equilibrium is an event that seems to be happening more and more on the Hive Blockchain. Very low fees for the traders, and incentives for the liquidity providers. Like a match made in heaven.