Blacklist as alternative to minting fee
A flat minting fee designed to deter Protocol Yield Splitting gaming penalises every user uniformly. A blacklist of identified gaming addresses is a more targeted alternative that preserves UX for legitimate users.
Description
The eBTC protocol is considering implementing a minting fee to prevent users from gaming the system by minting eBTC right after a rebase and repaying it just before the next rebase, thereby bypassing the Protocol Yield Splitting (PYS). However, this approach impacts all users, including those not attempting to game the system. An alternative approach using a blacklist mechanism could be considered as a first step or complete alternative.
Impact
Implementing a minting fee affects all users, including long-term holders and legitimate short-term users who aren't trying to game the system.
It also may discourage legitimate short-term usage of the protocol, potentially reducing overall liquidity and utility.
Worth noting that adding a minting fee, while it generates additional revenue for the protocol, does so at the cost of user-friendliness.
Recommendation
Implementing a blacklist approach as an alternative or precursor is recommended as it only affects users identified as attempting to game the system, preserving the experience for legitimate users.
