Boost Fee Split & $FLIP Burn Increase

With our upcoming 1.8 release comes a host of changes, one of which is the Boost fee split to $FLIP buy-and-burn. Below is a breakdown of what this change entails and how it affects Boost users.

Impact on Boost Liquidity Providers

Boost users may notice a reduction in Boost yield. As of v1.8, 50% of the Boost fee will be redirected to the FLIP burn. This means yields will effectively halve, with the fee to Boost yielders now roughly at 0.025%, while the other half of the fee is allocated to $FLIP burn.

Why Are We Making This Change?

We outlined the rationale in a detailed blog post, but the essence is to address the economic security challenges associated with Boost. Currently, we have excess Boost liquidity—more than needed for the volume we process—leading to idle capital and potential economic risks in the future. 

This change is expected to make Boost less attractive for some LPs, potentially redirecting liquidity into other Liquidity provider strategies. For those who remain in Boost, this could result in increased yields. This dynamic is expected to play out and hopefully less idle capital lying around.

The Impact on Burn

The introduction of the Boost fee split will add approximately 0.025% to the overall burn rate, increasing it from 0.1% to 0.125%. This represents a 25% increase in the total burn rate.

At this new rate, the burn mechanism becomes more dynamic. Now, an increase in Boost volume directly translates into an increase in the burn—not just an increase in overall volume. 

This sets the foundation for exploring additional avenues to enhance the burn mechanism, such as higher swap fees or fees on other in-app strategies. It allows us to make more flexible and dynamic decisions moving forward.