It sounds fantastic. Very smart and thorough.
Can you lay out the risks in laymens terms?
It sounds fantastic. Very smart and thorough.
An overall good idea, and very interesting ! I’ll need to read and reread it again, it’s quite complex for me… but it would be a Yes for me !
That’s quite the funding, could it be broken down in stages at it was suggested by Rummy ?
And I too would ask if it would be possible to lay out the risks in laymen terms !
But it NOT burns USTC supply. Where sense. We need massive USTC burns first.
@nath you brought some good point indeed.
Thanks appreciate, that was the idea indeed. For us we don’t see it as a bonus but rather as half our payment. Instead of trying to convincce by doxing or else, we’re leaving half our money in the community pool:
It is performance based so we must deliver if we want to unlock it
We’re leaving it in the community pool for others to use in the meantime, “cash management” and “good neighbourhood practices” are important with the community pool for the ecosystem to function properly
Even if we tick all the boxes, it is subject to a final vote and the community could simply vote NO.
So we’re willing to take a risk with the community similar to the one the community is taking with us. Please also note that on the community side the max risk is losing 50k$ eg. we either run away with the first payment or we’ll deliver and keep doing so. Whereas on our end the max risk is 125k$. But we’re comfortable with it because we wish to do more in the future and someone has to take the first step by the time what you mentioned before is in place (payment management solutions etc.)
If we want to be decentralised, we must streamline our processes so we can scale. We could offer an SLA but it would create more problems down the line:
We concentrate the knowledge of the core, wait until there is 500M$ in the community pool and watch us armlock you and reprice the SLA at 100M$ for the following year. Of course I’m joking/exagerating here but the community should not put itself in a potential dangerous situation - advise from our past experience in the financial industry - Have fun saying NO to your Trader/Quant/Dev star who holds the keys to your system
I am hoping to see more teams / actors proposing their services in a similar way and this model wouldn’t scale
I think much better, we fill the community pool so we can afford resident core team / contributors which are transverse accross all the core components (including this one, and future to comes by other teams). This implies to have clear documentation, testing and training. So we need to streamline the testing / training process, and in our case, our pricing tools is written in python so we can then create notebooks which are interactive docs from which we can then auto generate content. This makes training easy and allows contributors / support to come and go and share knowledge in a smooth way. You can also have access to teams such as notional dao, which operate across the cosmos ecosystem, and again, having money in the community pool helps a lot.
Ideally, you would (also) have some contributors operating their validator so they secure the network, get paid through commission and offer services such as PR reviews, support etc. SCV-security validator is a great example of what can be done: https://www.scv.services/.
Finally on this topic, many know Terra Classic for USTC but it is more than that. For example, you can easily interact with the blockchain with many languages making it easy to write the tooling around the platform to automate the monitoring and other recurring tasks so you can streamline processes around support. In our case, with our python tool we want to streamline what’s called “Model Validation process”
It’s not about attracting our holders, but rather traders in our tokens, or any crypto trader generally speaking: Current daily trading volume in LUNC and USTC is around 100M$ with spikes up to 800M$ for LUNC alone. We want to capture between 0.01% and 0.05% of that on-chain. This then creates arbitrage opportunities which in turn brings in more actors and so on.
Regarding on-chain trading:
Uniswap v3 is doing a pretty good job at it: The Dominance of Uniswap v3 Liquidity
It makes sense given the current CEX related events
Natural replacement for Binance when/if they decide to stop burning and we’ll have to address that at some point anyway, better be ready
Unique product offering with indices. This leverages/highlights one of the key feature of our platform eg. easy to use DEFi interfaces turbo loaded by the cosmos ecosystem
Shiba inu on Uniswap v3: Uniswap Info we also want in !
Besides, this is an intermediary step and the natural evolution: We are repurposing an existing component of an existing DEFi platform rather than developping something completely new or pivoting the platform too aggressively which is a risky move as we saw with Meta. This is more about reusing and restructuring the existing platform in a clever way so we can become self sustainable and fund a revival effort.
Again we need to define and streamline this process as a community. Same as above, validators could be good for that combined with resident core team / contributors and other actors such as notional or TGF. This will be key if we want to be able to ship fast and continuously in a decentralised way.
We also need to use Agora more and not only the proposal category.
Again, we need tooling for that, and this is the tricky part at the moment, we also need to create value for token holders and to fund ourselves. If you look at the way this proposal is structured it doesn’t just say “let’s do this we’ll 5x”, it also tries to show a way to work with the community pool:
It identifies clear goals and deliverables
It defines a clear budget and a payment model
It leaves room for others to step in and provide additional services such as those you have mentioned
Basically we need TFL’s internal infrastructure and that’s what we’re also trying to setup in a decentralised and open source way.
At the end of the day it will take some time to get everything right but it has to be an iterative process whereby we ship to add value, define a process in the meantime, then identify flaws, enhance, ship again and so on. And by the look of this post we have plenty of skills in the communnity to get it right. I personally believe this is the beginning of a cool and exciting phase.
This is the first ‘substantial’ infrastructure upgrade I have seen since the collapse of the Luna ecosystem ~ thanks for providing it! Things were getting boring.
Great proposal! Very well thought through, written, and addresses aspects of ownership, development, benefits, and accountability! It would be great to get some attention on this with Discord discussions, maybe an AMA, and evaluate how this may support / interact with current plans of TR of on chain development & roadmap.
Overall, luna-legend is definitely in support of this plan! Thank you for writing this up and best wishes to work through community feedback! You have our vote!
@johny ~ The only thing I would like to see (and the community should too) is more proof that your team is capable and trustworthy… This would be the first large construction project our ‘Classic’ community puts into motion. We really need to ensure the outcome is what you’re proposing so our funds don’t get wasted.
Please prove you’re not just knowledgeable about the DEX design and will run off with the funds and leave the community with nothing or a poorly constructed DEX.
Your design sounds great.
I’ve read it twice now and I think you should crack on and give us a proposal to vote on.
It is very nice and worth trying to prepare such a detailed offer or suggestion. Since the subject is a technical issue rather than a purely financing feature, Terra software developers and validators should discuss and analyze in detail.
and at the end of the job , I think that the job should be handed over to the team that made the offer when the offer is proven to be safe and useful .
I would like to say that your knowledge and work is very valuable.
Hi! After a few day od reading, i think is very nice trying to prepare such a detailed offer. I would like to say that your knowledge and work is very valuable.
Hi @Pascal glad you like it. So you have 2 kinds of risks:
1 - Operational risks eg. Someone hacks and steals the tokens (LUNC and USTC for example) allocated to the DEX. That’s why we want to separate the tokens allocated to the DEX from the rest of the Oracle pool tokens (so they couldn’t steal everything even if they stole funds from the DEX).
2 - The financial risk: Let’s say you start with 1000 LUNC and 100 USTC, you have 4 worst case scenario:
- We end up with 5000 USTC and 0 LUNC if LUNC moons
- We end up with 0 USTC and 5000 LUNC if USTC moons
- We end up with 5000 USTC and 0 LUNC if USTC goes to 0
- We end up with 0 USTC and 5000 LUNC if LUNC goes to 0
And obviously all the scenario in between eg. 91 USTC and 1072 LUNC etc.
Numbers are for illustration purpose to make it easy for you or anyone else to understand the extreme risk scenarios.
Basically the only time where we lose everything is if we get hacked.
The idea behind the risk management strategy is to always maintain around 1000 LUNC and 100 USTC while earning LUNC from transaction fees. These will be distributed as follow:
- % allocated to Oracle pool
- % allocated to Community pool
- % allocated to burn $LUNC
% are decided via governance by voting.
So for example the community could vote on:
- 33% allocated to Oracle pool
- 33% allocated to Community pool
- 33% allocated to burn $LUNC
Hope this helps !
Hello @X-fileperseek ,
Thanks for the feedback, pls see below for answers to your questions/concerns:
No, GMX is decentralized Perpetual exchange. In our case there will be No leverage at all.
In GMX case you are taking a (levered) bet on the value of an asset which is determined by an oracle price.
In our case we wish to use the Oracle Price to risk manage our liquidity position eg. as a form of capital control.
Completely agree, the safer the better.
In a way by refilling the Community Pool the community DEX is also contributing towards the costs of maintaining it.
“All of the above problems” I believe these arised from a misunderstanding which I have hopefully adressed.
This said, I agree, it would help to attract external investors, however they won’t simply appear and they’ll expect “things” in return for their investment.
Showing this is a profitable and innovative platform will help attracting them while putting us in a better position to negotiate good terms for us (the protocol/the community/LUNC and USTC holders). Attracting external investors is also the idea behind the goal set to “Innovate to (re)establish Terra Classic as a top DEFi protocol”
Appreciate the feedbacks, fair points, we’ll be doing some AMAs and obviously answering questions here to help clarifying things for everyone. We’ve also gone for an iterative process so you can realise early in the process potential issues. Basically you’ll get the DEX infrastructure first (to swap LUNC/USTC), and then extra features on top eg. support for LUNA and ATOM, indices and liquidity/arbitrage strategies.
Thank you for your work, great stuff and thanks for layout out the risks.
What a great opportunity.
I love your work! Thank you, I will vote yes.
Please keep us updated (on this thread) of those AMA’s. When and where they are happening, please.
I think you have to dox yourselves and after its guaranteed the project going to be approved.
First of all, thank you for putting forward such an interesting proposal.
What measures are there in place to ensure rebalancing the exchange rate of the “advantageous” coin credited from the oracle pool following a mass swap draining event on the DEX as described above?
I did an AMA with Trader Rocko last Sunday where we spoke about this proposal and the long term vision. There is another one planned with him coming Sunday.
I am available on twitter if you wish to keep up to date: @faffyswap
In short I would say that the “uniswap v3 concentrated liquidity feature” is what will protect us, meaning that we can chose to provide liquidity where we want and we don’t have to provide all the liquidity at once. We’ll have a strategy to determine how to do that (how much liquidity and at what price levels) and it will be tested, back tested and stress tested.
Does this answer your question ? It would help if you could be more precise or if you could provide an example.