Hi @dfunk ,
I was more asking since I remembered there being a distinction between the stability fee tax and the tobin tax. I went ahead and looked them up again, and they are different. Although, I will say that the stability tax is not very clearly defined in the columbus-5 documentation, although a little clearer in the columbus-3 documentation.
Here is what I found:
TL;DR:
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Stability Fee Tax: Treasury module based tax, that is capped, on all transactions that are “stable coins” that are not swaps.
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Tobin Tax: A Market module based fixed fee added to swaps between “stable coins” to prevent front-running.
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Spread Fee: A Market module based minimum adjustable fee, that is adjusted upward during times of volatility, to maintain a constant product between the fiat value of the LUNA v1 pool and the size of the “stable coins” pool, and is added to swaps between LUNA v1 and “stable coins”.
Longer Explanation:
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Stability Fee Tax is a treasury module based tax called the “Tax Reward”, as one of the three macroeconomic indicators which corresponds to the Tax Rate policy lever (macroeconomic in terms of system wide).
- It is defined as “Income generated from transaction fees (stability fee) in a during the epoch” and its monetary lever is defined as “the amount of income coming from Terra transactions, limited by tax cap”. There is a note on the Fees page in the documentation about the stability tax that defines it the clearest (before it was turned to 0% in proposal 172, and the burn tax functionality repurposed the stability tax with [merged code]):
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Stability Fee Tax: “the stability fee tax rate… used to be charged on any transaction using Terra stablecoins, excluding market swaps.”. In other words it is a tax on transactions that happen using stable coins, but those transactions are not swaps (whereas Tobin tax is on swaps).
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You can see the “T” formula variable is for Tax Rewards, and is used in the formula for the Tax Proceeds section which is tied to the Tax Rate and Tax Caps. The parameter that sets it is in the Treasury space in the key Tax Policy, just as the Burn Tax is (which also uses that key).
- Since the Stability Fee Tax is a lot less clearly defined, here is the proposal discussion that turned off the Stability Fee Tax in Proposal 172 originally.
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- It is defined as “Income generated from transaction fees (stability fee) in a during the epoch” and its monetary lever is defined as “the amount of income coming from Terra transactions, limited by tax cap”. There is a note on the Fees page in the documentation about the stability tax that defines it the clearest (before it was turned to 0% in proposal 172, and the burn tax functionality repurposed the stability tax with [merged code]):
Thankfully the Fees page defines Tobin Tax and Spread Fee much more clearly:
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- It is a market module based tax, and its parameter is in the market space in the parameter key TobinTax
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- It is a market module based tax, and its parameter is in the market space in the parameter key MinSpread
Just sharing that since it took a while for me to piece together the Stability Fee Tax (what it actually was) - and where it really was defined in the documentation. It seemed like it was somewhat wrapped in obscurity other than in the code, a passing note, and one proposal discussion. Passing it along if helpful (if not, just disregard).
On the naming, I heard one person say we should instead call it a community buy back program (rather than burn tax).
But, really I just noticed what you mentioned about the Tobin Tax, so I went back to check up on it again. Feel free though to let me know though if I have missed anything in my thinking (I would be thankful).
I hope you have an awesome day today 