Flamingo Finance plans to increase the Flund DEX-traded fund’s exit fee from 0.5% to 2%. Flund is a single-staking feature that receives portions of daily FLM minting rewards and fees accrued on the DeFi platform. Since the April launch, the fund has accrued more than 1.5 million FLM tokens from trading fees.
The Flund pool accrues 20% of daily FLM minting rewards and approximately 16% of trading fees on the platform. Users can only enter the Flund by purchasing FLUND tokens with FLM tokens. FLUND holders incur an exit fee when liquidating tokens for FLM. The Flamingo team established an exit fee to encourage long-term holding, as opposed to a place for storing FLM tokens between trades.
The Flamingo team notes that users currently accrue enough FLM tokens to cover the 0.5% exit fee in approximately three days. They stated, “We have seen that the current exit fee does not work as expected since the performance of the FLUND is also better than expected.” Once the on-chain order book launches, the team anticipates a significant increase in FLUND fee gains. They believe that if the exit fee is not raised, the incentive for long-term holding will be further reduced.
The exit fee increase will go live once the platform integrates the order book, tentatively scheduled for early August.
The full announcement can be found at the link below: