Frontend Fees and the Crosschain Association

Dear FLIPers,

Today, we announce a change in the way the swap.chainflip.io and all frontend services associated with the core chainflip.io swapping experience will be operated.

We have seen the support from third party integrators expand dramatically in the last few months, with Rango and Swapkit making up an increasingly large proportion of the total swap volume running through the protocol, but swap.chainflip.io has been the most widely used frontend to access the Chainflip swapping protocol to date. Developed since inception by the team here at Chainflip Labs, we believe we have built a highly successful service that is the benchmark for frontend services using the protocol.

The Chainflip team has always been committed to decentralisation, and we will always look for opportunities to further decentralise control, improve the resilience of the Chainflip ecosystem, and promote a healthy competitive environment amongst all participants. Our view is that having the most widely used frontend continue to be controlled by Chainflip Labs, with the constraints that imply, does not serve that aim.

For example, the frontend has been fee free due to uncertainty with respect to regulatory concerns (which makes it an outlier both within our own community and mainstream DeFi applications), and, while we do not agree, there has been some perception that recent suspension of our own frontend in response to the activity of bad actors in some way suggests centralised control of the protocol. 

We have therefore decided to licence the entire suite of frontend services out to a newly established Swiss association, the Crosschain Association, based in Zug. Switzerland has one of the clearest and most stable crypto regulatory environments in the world, and Crosschain Association will run swap.chainflip.io without the constraints that Chainflip Labs operates under as core developer of the Chainflip protocol. 

While Crosschain Association will initially focus on taking over the Chainflip Labs-developed frontend service, it is a non-profit organisation with wider aims to provide access to the Chainflip protocol and financially support further development of the protocol and other associated cross-chain tooling projects. 

While a fee-free frontend may be superficially appealing to many users, it is not sustainable - running a frontend service costs money and having one provider try to offset those costs from its own funds impacts the competitiveness and long-term prospects of the ecosystem as a whole. In order to fund its operations, and to pay Chainflip Labs for licensing and any necessary technical support, Crosschain Association is expected to charge broker fees for swaps via swap.chainflip.io. The final broker fee amount is not yet fixed, but it will start out with a 0.15% fee. It may be adapted over time as necessary

Between the association and Chainflip Labs, we expect that these fees will help to further fund the development and growth of the service and the protocol at large, taking pressure off the token and achieving a sustainable revenue source for all the development work that Chainflip needs to thrive, while also improving the decentralisation and resilience of the network.