Terra Classic Community DEX

Hi @johny

This is a well thought-out proposal and thank you for the detail presentation. I like the Core idea of treasury management to generate real yeild at the protocol level. My question are

1 is there any requirement at any stage of the project for a multi-sig wallet admin?. Since fund will be deposited in pairs liquidity pools.

2 What is the difference between this strategy of managing concentrated liquidity compared to the old VISOR Finance?

I voted YES to the 1 STEP, 11049 | Community pool spend proposal.
Now can somebody tell me why so many people have voted “No with veto”?
Usually the “No with veto” is used for the scammer, to let them lose the LUNC.

So why people are against this?

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Hi @Thorchain.BULL that was a harsh one :sweat_smile:. I see where you coming from though and you’re right we should be careful. The risk of an IL at 100% or 50% etc. is in $ value, not in token.
Basically what I’m trying to say is that in our case, the worst case is to end up with a lot of USTC tokens or a lot of LUNC tokens. Even if they’re worth 0, it’s fine, the Oracle already has a position in tokens anyway and we’ll still have tokens to distribute. We believe that’s one of the few case where LPing wouldn’t actually be EV-

May I kindly request that you move to abstain by the time we provide you with data and if you’re not happy with the data you see then switch back to No With Veto ? I mean people are getting excited the prop creates the much need emulation and hopefully the unity we need to move fwd.

Does it seem reasonable ?

Thanks !

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You guys want to borrow a sizable portion of the oracle pool & take on risks in a space where 95% of market participants lost historically.

You’re telling me it doesn’t matter if an arbitrageur extracts value from the pool’s assets because that’s what the yield is paid in?

The arbitrageurs are still taking value away from the pool. If an arbitrageur extracts then it’s less tokens to pay yield in to stakers. At the end of the day they denominate their positions in USD.

We’re not even talking about the other risks (smart contracts, trust etc).

I’m going to be really blunt : any validator voting yes for this isn’t doing a proper risk assessment. There is no way this is +EV

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I’m generally not supportive of this.

  1. there are already 2 dexes on classic, one is 100% open source (astro).
    I’m not sure why you are going through the development cost/risk of building another AMM, especially since you could just clone theirs, and potentially use their battle tested stuff. (and it would give you a much faster lead time)

  2. you could even just build a dApp that uses OSMO, Injective, or Kuji’s trading chains to do the work via IBC… this would be beneficial to everyone, as it would add TVL to existing TVL, which would mean better trades. (astroport is also building something called slAMM which does something similar to this)

  3. using the community funds is a novel idea. I’m not opposed to it, but it does have risks as @Thorchain.BULL mentioned.

  4. how does this effort self-fund? How do we ensure that the dex will be maintained in a years time if it isn’t generating $ for you?

I also have little no faith in your timelines 4 man months to write a cosmos module? have you written a AMM before? or a cosmos module? (I mean it usually takes 2-3 months to schedule an audit… so I’m not sure what you based your estimates on)

it took the astro team at least 6 months, and mars is currently 6 months out, and are just in BETA now…

I could go on, but you get my point… it’s a no from me.

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And I’ll say to “face the music”. This is exactly why I created Governance chaos topic. This case has only just begun to be discussed. It was far to early to put it into vote. How much it has passed? A week? We should first discuss it properly, find out all the pros and cons, and only then decide. For such difficult case scenario I’ll say minimum one month of discussion.

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What I’m saying is that if they take something they give something. Either way we’re happy to have what they’ll give eg. LUNC or USTC

That’s the risk you’re talking about eg. I have 1000$ I convert to tokens and then one token goes to 0 and then I convert back and I end up with 0$
If I would have kept my tokens instead of LPing I would have lost “only” 50%.

Now in our case, it’s different we already have the tokens, and what matters is to have tokens to distribute as rewards. So IL for us means I start with 1000 LUNC and 10 USTC and I end up with 0 LUNC and 1000 USTC for example.

  1. I still have 1000 USTC to distribute
  2. We currently have 20M$ USTC and if it goes to 0 we lose 20M$ anyway

Also, we don’t have to start with a sizable portion of the Oracle Pool we can start with 1M$ (1.5% of the Oracle Pool) for example. Currently SHIB/ETH on Uniswap v3 has 1M$ liquidity and generate 500$ to 2k$ day. If Binance cuts the burn, we could at least work with that to keep covering DEV costs.

I do understand your concern, and again you’re right we ought to be careful, all I’m asking is give us few days so we can discuss a bit more before No Vetoing the prop.

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The whole point here is to allow the protocol to LP so the protocol can actually earn money and be self sustainable right. We’re reusing the existing AMM hence it’s faster.
The timeline does not include auditing.

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The value of the tokens we distribute as yield matter.

Huge majority of LPs are underwater in that sense, this makes 0 sense.

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If you want the Oracle has no choice but to hold the tokens. LPs are underwater because they started with USD and then converted to tokens to LPs.
In our case, we (the oracle) are LUNC USTC holders anyway, no matter what. The only risk is to alter the proportion of LUNC USTC of our holding.

And again starting with 1% of the Oracle Pool to earn 30-60k$ / month I think that’s a reasonable risk to take no ?

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You seem to have zero risk tolerance, and you have voted “No with Veto” which is unusually harsh. Therefore I will redelegate away from you immediately.

We desperately need a community-owned DEX, and this is the first step. With a community-owned decentralized DEX we could quite easily create an over-collaterized stablecoin in the future. More detail here:

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Feel free this is why we have decentralized governance and delegated voting.

I have good understanding of all the issues at hand & spent a long time in the governance issues & data of protocols affected by this.

I give it less then 10% chances they can run this profitably over a 6 months period vs just holding both assets, this is why I’m voting no.

If it was 75% I’d be voting yes.

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While we are waiting for more information from faffy, could you please explain how you got this 10% chances?

It’s kinda explained above.

Outside of less than a handful of the most popular pools, 99%+ of concentrated liquidity LPs are underwater vs just holding the assets separately.

As far as the notion that it doesn’t matter what assets yield is paid in, it doesn’t hold the water. The usd value of those assets relatively to just holding is important. It impermanent losses are higher than fees this makes 0 sense.

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if you are so sure its profitable, use your bank credit line, as the bank will gladly credit you as loan will be repaid with fee generated by dex, establish company, prove to community you have working alpha products and we will gladly participate 50% of project amount. or are you just money grabbing?

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No, these 10% are not explained. They are simply taken from your head, “trust me bro”, based on the fear that the dex will be among the unsuccessful ones, whereas for an adequate assessment, we need more modeling data, risk assessment. And I think before voting with a veto, one should request the necessary information, otherwise its irresponsible.

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That’s on the person making the proposal and asking for money to prove sir :rofl:

The argument of USD value of LP vs HOLD shouldn’t matter, only numbers of token does, is some of the worst mental gymnastic I’ve seen someone asking for capital do. Pretty insane to argue agaisn’t this

I’m voting based on what is proposed, they sumbitted it to voting. Anyone voting yes for this needs to be questionned

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Sensible risk aversion is not the same as zero risk tolerance.

Doubtful. And what’s a “decentralized DEX”? A “decentralized decentralized exchange”? :joy:

If you’re gonna come out with guns blazing at least proofread your replies.

Shalom! :pray:

“That’s on the person making the proposal and asking for money to prove sir :rofl:
To prove what? Your 10%? Nice.
“I’m voting based on what is proposed, they sumbitted it to voting. Anyone voting yes for this needs to be questionned”
Ok. Awesome, vote no with veto to non-malicious proposals without asking more information if it’s not enough for you. 6.7% VP with this mentality :scream:

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Sir you didn’t cast your vote on proposal 11030 . Separation from TFL please cast on your vote sir. That is also a important proposal