Since launch, Dharma has paid for network fees, aka gas fees, for all user transactions. We pay gas for:
– Deploying or recovering a Dharma Smart Wallet
– Performing a swap
– Transferring funds from Dharma to an external address
In the spirit of early transparency, we want to inform all Dharma users that we are updating our gas policy.
Here are the specifics of our new gas policy:
– Security (aka deploying or recovering a Dharma Smart Wallet) — no change, still 100% covered by Dharma
a) If the value of your swap is >= 500 USD, gas will be covered by Dharma
b) If the value of your swap is <= 500 USD, users will pay for their own gas. With this change, Dharma will no longer have a minimum required trade value.
– Withdrawals — users will pay for their own gas
Why are you changing policy?
While we would prefer to continue to pay for all transactions for all of our users, the following factors together have forced us to change course:
1. Rising gas costs: over the past few months, we have sometimes paid $25 or more for user withdrawals, and even when gas is inexpensive, withdrawals cost several dollars each. These costs are simply not sustainable given our userbase’s growing scale.
2. Incentive mismatch: By paying for user gas, users had no reason not to withdraw, exacerbating network congestion. By having users pay for their own gas, users are incentivized to wait for network congestion conditions that result in a withdrawal fee they are comfortable with.
3. Abuse: Unfortunately a few users abused our withdrawal fee subsidies by minting endless gas tokens or making 100s of tiny transactions a week.
And while we have considered a complicated incentive-aligning withdrawal policy, what’s simplest, safest, and most straightforward is to end the withdrawal fee subsidy.
When does the new policy take effect?
Friday 23 October at 5pm PST.
What token are fees paid in?
Withdrawal fees can be paid in any token. If you hold ETH in your Dharma Smart Wallet, the fee will be taken in ETH. If you hold no ETH but hold stablecoins, the fee will be taken in stablecoins. If you hold neither ETH nor stablecoins, the fee will be taken out of one of your token balances, but will be slightly higher to offset our cost of converting the token to ETH.