Thank you for the feedback, @bangus. Reducing the interface fee has always been a priority, and the adjustments outlined in this proposal do make it viable. We’ve updated the proposal accordingly—please see below:
1 . Introduction
SaucerSwap Labs proposes an integrated update to the protocol’s incentive framework that
- Lowers the interface fee from 0.4% to 0.25%—a 37.5% reduction;
- Realigns Masterchef V1 : V2 emissions to 44.44% : 55.56% for both HBAR and SAUCE;
- Cuts the remaining THF-granted HBAR emissions by 87.55% while extending their life by seven epochs (to 3 Nov 2025);
- Reallocates SAUCE buybacks to a 45.5% xSAUCE / 30% Development Fund / 24.5% Protocol‑Owned Liquidity (POL) + Incentive Reserve, with the entire 24.5% routed to farms and LARI during a stabilization period; and
- Updates the weighting schemes of farms and V2 pools receiving LARI rewards, aligning reward distribution more closely with capital efficiency, as measured by volume-to-TVL ratios.
Collectively, these measures mitigate an HBAR rewards cliff, lower fees for our users, keep LP yields competitive, and create a flexible emissions buffer—all while reinforcing circular deflationary feedback of SAUCE within the ecosystem.
2 . Background
- HBAR grant status. Of the original 23 million HBAR liquidity‑mining grant (referred to as ‘Incentives Campaign’), ≈ 851,820 HBAR will have yet to be distributed as of epoch 45 (28 Jul 2025).
- Current emissions. Masterchef emits 0.747 HBAR s⁻¹ ( 903,571 HBAR/epoch with some HBAR retained for subsequent epochs**)**, ending the grant halfway through epoch 46 under status‑quo parameters.
- SAUCE buybacks. 100% of bought-back SAUCE is currently auto‑compounded into xSAUCE, leaving no allocation for POL, development, or tactical incentives. Annualized buybacks (FTM) are projected to be $1,594,761. Buybacks are sourced from the 1/6 protocol fee, HBAR native staking rewards, and Masterchef emissions.
- Interface Fee. SaucerSwap Labs’ interface fee is currently 0.4%, lower than HashPack’s 0.7% fee but considerably higher than Uniswap Labs’ fee of 0.15%.
Industry peers (GMX, PancakeSwap, Osmosis) have shown that balancing staking rewards with strategic liquidity and growth reserves stabilizes token velocity and deepens liquidity. This proposal adapts these principles to SaucerSwap’s tokenomics model, enabling lower interface fees and a more integrated revenue model.
3 . Proposal Overview
3.1 Reduced Interface Fee
The 0.4% fee incurred when swapping in SaucerSwap Labs’ interface is lowered to 0.25%. This is a 37.5% reduction.
3.1 HBAR Emission Realignment
| Parameter | Current | Proposed | Δ |
|---|---|---|---|
| HBAR/second | 0.747 | 0.093 | −87.55% |
| SAUCE/second | 2.114 | Unchanged | 0% |
| V1 : V2 split (HBAR & SAUCE) | 51.48% : 48.52% | 44.44% : 55.56% | ↑ V2 weight |
Resulting per‑epoch flows (epoch length = 14 days):
| Destination | HBAR/epoch | SAUCE/epoch |
|---|---|---|
| V1 Farms | 50,000 | 1,136,486 |
| V2 (LARI + DAO) | 62,500 | 1,420,722 |
| Total | 112,500 | 2,557,208 |
- Campaign extension. 851,820 HBAR ÷ 112,500 HBAR = 7 epochs, plus a buffer to account for any rounding errors or other inaccuracies that might arise. The grant therefore lasts through epoch 52, concluding 3 Nov 2025.
- LARI boost. The V2 allocation of SAUCE is split 33% : 67% between LARI and DAO treasury, raising LARI rewards to 450,000 SAUCE/epoch (+ 20%).
3.2 Revised SAUCE Buyback Allocation
| Destination | Allocation | Purpose |
|---|---|---|
| xSAUCE | 45.5% | Maintain competitive single‑sided staking APR (projected >4% median APR, calculated using 2023 - 2025 monthly data). |
| Development Fund | 30% | Provide a sustainable revenue stream to support the development and maintenance of the SaucerSwap protocol and interface; offsets loss in revenue due to reduction in interface fee. |
| POL + Incentive Reserve | 24.5% | Top‑up farm/LARI rewards during a stabilization period following the reduction in HBAR emissions; deepen key liquidity pools in the future. |
Stabilization period. Until either (i) the 7‑day avg. V1 and V2 pool Total APRs return to ≥ 30% and ≥ 80%, respectively, or (ii) 90 days elapse, 100% of the 24.5% POL + Incentive Reserve is diverted to farms (10.89% of buybacks) and LARI (13.61% of buybacks).
3.3 Updated Weighting Schemes
The weighting schemes for farms and V2 pools receiving LARI rewards have been updated to align reward distributions more closely with capital efficiency, as determined by volume-to-TVL ratios. Refer to Figures 1 and 2 in Appendix A for detailed updated weights.
4 . Rationale
- Reduced Interface Fee and Integrated Revenue Model. By allocating 30% of buybacks to a development fund, SaucerSwap Labs is able to offset a loss in revenue from reducing the interface fee to a more competitive 0.25%. This bolsters growth and development of the project, while simultaneously making swapping much cheaper in a post-EIP-4844 environment where it’s increasingly important. This allows for lower fees across the board for users of the SaucerSwap interface and no increase in fees for programmatic trades. This is achieved all while maintaining the single-sided staking APR close to its median based on 2023 - 2025 data.
- Extend Incentive Runway. A seven‑epoch runway smoothens the yield curve, cushioning LPs against an abrupt rewards cliff.
- Protect LP Yields. Diverting 24.5% of buybacks to farms/LARI, realigning Masterchef V1 : V2 emissions, and re-weighting farms/LARI offsets much of the HBAR reduction—projected V1 yields fall 27.5% instead of 40%, V2 yields fall just 7% instead of 45%.
- Deepen Liquidity. Once the stabilization period ends, the same 24.5% POL + Incentive Reserve can be re-allocated to growing key liquidity pools and/or incentivizing other areas of the protocol, lowering slippage and ensuring rewards remained aligned.
- Long-term sustainability. The 4% burn allocation (discussed in the original buyback proposal) was removed because buybacks are better allocated to POL and incentives to deepen liquidity and sustain LP yields. This approach creates circular deflationary feedback for SAUCE by redirecting bought-back tokens into the protocol to reward active participation. Conversely, the burn mechanism might only temporarily support protocol endeavors but increase reliance on passive and speculative holders, risking fundamental exposure to broader market sentiment cycles.
- Conserve Treasury. No treasury draw‑downs or increase in SAUCE emission rate are required; this model uses existing grant balances and bought-back SAUCE.
5 . Benefits to the DAO & Community
- Cheaper Swap Fees. The reduced interface fee makes trading via the SaucerSwap interface much more affordable.
- Smoother Yield Curve. The seven-epoch extension in which HBAR is emitted at a reduced rate results in a smoother yield curve, supporting LP retention.
- Competitive APRs. The incentive reserve allocation blunts the impact of the HBAR emission reduction, keeping SaucerSwap yields competitive and sustainable.
- Liquidity Depth & Price Resilience. Future POL growth reduces slippage and drives volume.
- Treasury Sustainability. Using market‑bought SAUCE avoids new dilution and preserves treasury reserves for future initiatives.
6 . Risks & Mitigations
| Risk | Mitigation |
|---|---|
| xSAUCE APR drops | xSAUCE yield is projected to be approximately equal to its median; DAO may redirect a larger allocation of the buyback flow to xSAUCE by simple majority. |
| POL vs. Incentive tug‑of‑war | Track POL and liquidity incentive balances; SaucerSwap Labs commits to transparent reporting in public channels regarding efficacy and distribution. |
7 . Communication & Transparency
- Transparent Documentation. Updated tokenomics data will be published in the SaucerSwap Docs.
- Real‑time Reporting. On‑chain analytics for buybacks will continue to be displayed in Discord via the Buyback Bot.
- Comms. Channels. LARI and farm specifications will continue to be communicated in Discord and on X, as well as our documentation.
8. Conclusion
This proposal strategically updates SaucerSwap’s incentive framework to lower the interface fee, extend liquidity incentives, realign emissions, and optimize SAUCE buybacks, thereby balancing protocol-owned liquidity and yields without token dilution. The refined weighting schemes further align rewards with capital efficiency, reinforcing a sustainable, circular token economy that supports ecosystem growth, liquidity depth, and competitive yields for LPs.
We respectfully request the community’s support.
9 . Voting Options
- For — Implement the reduced HBAR emission rate (0.093 HBAR s⁻¹), new 44.44 % : 55.56 % V1 : V2 split, 45.5 % xSAUCE / 30% Development Fund / 24.5 % POL + Incentive Reserve buyback routing, and updated farm/LARI weighting schemes. SaucerSwap Labs will reduce its interface fee to 0.25%.
- Against — Retain current 0.747 HBAR s⁻¹ emission rate, existing V1 : V2 weights, 100 % xSAUCE buyback allocation, and farm/LARI weighting schemes. SaucerSwap Labs will leave its interface fee unchanged at 0.4%.
- Abstain — No position on this proposal.
Appendix A
Figure 1 — Updated Farm Weights
| Pool | Volume/TVL | Current Weight | Proposed Weight | Change |
|---|---|---|---|---|
| SAUCE/HBAR | 0.08 | 48.33% | 48.56% | 0.47% |
| USDC/HBAR | 1.50 | 15.71% | 15.75% | 0.28% |
| HBAR/BSL | 0.38 | 1.21% | 1.26% | 4.29% |
| HBAR/XSAUCE | 0.08 | 4.83% | 4.50% | -6.89% |
| HBAR/PACK | 0.16 | 2.90% | 2.88% | -0.68% |
| HBAR/DAVINCI | 0.01 | 1.21% | 1.13% | -6.89% |
| SAUCE/XSAUCE | 0.02 | 1.45% | 1.35% | -6.89% |
| WETH[hts]/HBAR | 0.43 | 2.17% | 2.48% | 13.81% |
| HST/HBAR | 0.10 | 2.42% | 2.03% | -16.20% |
| GRELF/HBAR | 0.07 | 1.45% | 1.35% | -6.89% |
| QNT[hts]/HBAR | 0.58 | 1.21% | 1.35% | 11.74% |
| STEAM/HBAR | 0.13 | 0.72% | 0.68% | -6.89% |
| DOVU/HBAR | 0.76 | 0.72% | 0.90% | 24.15% |
| WBTC[hts]/HBAR | 0.77 | 2.42% | 2.57% | 6.15% |
| LCX[hts]/HBAR | 0.19 | 1.45% | 1.35% | -6.89% |
| WAVAX[hts]/HBAR | 0.42 | 0.72% | 0.77% | 5.53% |
| USDC/SAUCE | 0.50 | 3.09% | 3.24% | 4.75% |
| HAI/HBAR | 0.11 | 0.97% | 0.81% | -16.20% |
| HSUITE/HBAR | 0.98 | 0.72% | 0.86% | 17.94% |
| LINK[hts]/HBAR | 0.48 | 0.97% | 1.04% | 7.08% |
| KARATE/HBAR | 0.61 | 2.17% | 2.30% | 5.53% |
| DINO/HBAR | 0.20 | 1.21% | 1.04% | -14.33% |
| CLXY/HBAR | 0.07 | 0.72% | 0.59% | -19.30% |
| JAM/HBAR | 1.12 | 0.48% | 0.63% | 30.36% |
| SENTX/HBAR | 0.05 | 0.72% | 0.63% | -13.09% |
Figure 2 — Updated LARI Weights
Note that the HLiquity grant is factored in, so the HCHF and HLQT pairs have weights matching their grant allocations.
| Pool | Fee Tier | Volume/TVL | Current SAUCE Weight | Proposed SAUCE Weight | Change | Current HBAR Weight | Proposed HBAR Weight | Change |
|---|---|---|---|---|---|---|---|---|
| USDC/HBAR | 0.15% | 6.54 | 18.00% | 19.00% | 5.56% | 14.46% | 14.3492% | -0.77% |
| HBARX/HBAR | 0.15% | 0.06 | 7.00% | 7.00% | 0.00% | 4.34% | 4.2718% | -1.57% |
| SAUCE/HBAR | 0.30% | 1.55 | 19.00% | 19.00% | 0.00% | 18.31% | 17.2225% | -5.94% |
| USDC/USDC[hts] | 0.05% | 1.70 | 6.00% | 5.55% | -7.50% | 5.78% | 5.6957% | -1.46% |
| GRELF/HBAR | 0.30% | 0.11 | 0.00% | 0.00% | -% | 0.48% | 0.4746% | -1.12% |
| SAUCE/XSAUCE | 0.15% | 0.66 | 3.00% | 2.50% | -16.67% | 1.93% | 1.8321% | -5.07% |
| PACK/HBAR | 0.30% | 1.51 | 0.00% | 0.00% | -% | 2.89% | 2.7434% | -5.07% |
| WBTC[hts]/HBAR | 0.15% | 1.93 | 5.00% | 5.00% | 0.00% | 2.89% | 2.7434% | -5.07% |
| DOVU/HBAR | 1.00% | 1.86 | 0.00% | 0.80% | -% | 0.96% | 0.9113% | -5.07% |
| USDC[hts]/USDT[hts] | 0.05% | 1.74 | 4.00% | 3.50% | -12.50% | 3.86% | 3.5542% | -7.92% |
| KARATE/HBAR | 0.30% | 0.33 | 0.00% | 0.50% | -% | 0.96% | 0.9113% | -5.07% |
| PACK/XPACK | 0.15% | 0.73 | 0.00% | 0.00% | -% | 0.00% | 0.4746% | -% |
| WETH[hts]/HBAR | 0.15% | 2.59 | 3.00% | 3.50% | 16.67% | 2.89% | 3.3225% | 14.97% |
| CLXY/HBAR | 0.30% | 0.16 | 0.00% | 0.00% | -% | 0.96% | 0.4746% | -50.56% |
| XSAUCE/HBAR | 0.30% | 0.70 | 3.00% | 2.50% | -16.67% | 2.89% | 2.8478% | -1.46% |
| USDC[hts]/DAI[hts] | 0.05% | 0.60 | 2.00% | 0.00% | -100.00% | 1.93% | 0.00% | -100.00% |
| USDC[hts]/HBAR | 0.15% | 3.66 | 7.00% | 7.50% | 7.14% | 6.75% | 6.6450% | -1.56% |
| HLQT/HBAR | 0.30% | 0.07 | 0.00% | 0.00% | -% | 2.52% | 4.4456% | 76.41% |
| QNT[hts]/HBAR | 0.30% | 2.74 | 3.50% | 4.00% | 14.29% | 2.41% | 2.8478% | 18.17% |
| USDT[hts]/HBAR | 0.15% | 2.90 | 5.00% | 5.15% | 3.00% | 4.82% | 4.7464% | -1.53% |
| USDC/HCHF | 0.05% | 0.11 | 0.00% | 0.00% | -% | 2.03% | 4.918524% | 142.29% |
| USDC[hts]/WBTC[hts] | 0.15% | 2.78 | 2.00% | 2.50% | 25.00% | 1.93% | 1.8986% | -1.63% |
| HST/HBAR | 0.30% | 0.50 | 1.00% | 0.00% | -100.00% | 0.96% | 0.9493% | -1.11% |
| LINK[hts]/HBAR | 0.30% | 2.88 | 2.00% | 2.50% | 25.00% | 1.93% | 2.1359% | 10.67% |
| JAM/HBAR | 1.00% | 2.65 | 0.00% | 0.50% | -% | 0.96% | 0.9932% | 3.46% |
| USDC/SAUCE | 0.30% | 5.75 | 4.00% | 4.00% | 0.00% | 3.86% | 3.7971% | -1.63% |
| WAVAX[hts]/HBAR | 0.30% | 0.56 | 1.50% | 1.00% | -33.33% | 1.45% | 1.3765% | -5.07% |
| WETH[hts]/USDC[hts] | 0.15% | 2.04 | 1.00% | 1.50% | 50.00% | 0.96% | 0.9493% | -1.11% |
| WBNB[hts]/HBAR | 0.30% | 4.05 | 1.50% | 1.75% | 16.67% | 1.45% | 1.4239% | -1.80% |
| DAI[hts]/HBAR | 0.15% | 5.13 | 1.50% | 0.00% | -100.00% | 1.45% | 0.00% | -100.00% |
| USDC/CARAT | 0.15% | 3.87 | 0.00% | 0.75% | -% | 0.96% | 0.9493% | -1.11% |
| HBAR/HCHF | 0.30% | 1.93 | 0.00% | 0.00% | -% | 0.04% | 0.094576% | 136.44% |