This proposal would add USDC via Axelar as a valid fee token for use in paying transaction fees on Osmosis.

Background

Transaction fees on Osmosis have been payable in assets other than OSMO since v5. This is managed by the txfee module which specifies a denom to be accepted and an OSMO pool to use as a spot price for the quantity of that denom to accept. Any transaction fees paid in these denoms are collected in the module address and converted into OSMO for distribution to stakers at epoch.

This whitelist was initially set as all OSMO paired tokens with usable liquidity on 1st December 2021. Since this point there have been many new tokens listed on Osmosis that fees could be paid in, enabling new users to fund the transaction fee for their first trade on the chain. This becomes more important with the minimum fee requirement from Proposal 354 implemented in v15.

This proposal directly adds USDC.axl as a valid fee token to pay transaction fees in. This is prompted by reports of users bridging from Ethereum and being unable to carry out their first transaction, as well as data provided by Flipside which shows USDC as the most held assets in wallet with no OSMO.

Other assets will be proposed as required or in bulk when the capability to add multiple denoms at the same time exists.

Test

This proposal has been tested on Testnet here: https://testnet.mintscan.io/osmosis-testnet/proposals/57089, adding testnet USDC as a valid fee source and carrying out a transaction here: https://testnet.mintscan.io/osmosis-testnet/txs/F7311AC7AF48D4CD6E8640532FAF02207274E5F1A84196F9CB1357C537037104

Commonwealth Thread: https://commonwealth.im/osmosis/discussion/10478-add-usdc-as-fee-token