I love your work! Thank you, I will vote yes.
2 Likes
Please keep us updated (on this thread) of those AMAâs. When and where they are happening, please.
I think you have to dox yourselves and after its guaranteed the project going to be approved.
Hi,
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 âadvantageousâ coin credited from the oracle pool following a mass swap draining event on the DEX as described above?
Hi @Koch,
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.
Today we will do a live session where we will cover some of the basic concepts in this proposal with @DJTrev
I am available on twitter if you wish to keep up to date: @faffyswap
Thanks !
2 Likes
Hi @godoal,
In short I would say that the âuniswap v3 concentrated liquidity featureâ is what will protect us, meaning that we can chose to provide liquidity where we want and we donât have to provide all the liquidity at once. Weâll 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.
Thanks!
I am not sure tbh so hereâs an example using the numbers you have used on the financial risk scenarios:
at t+0, the DEX fills the reserves from the Oracle Pool with 1000 LUNC / 100 USTC
at t+1, LUNC moons so we end up with 5000 USTC and 0 LUNC
at t+2, the DEX supplements its LUNC reserves with another 1000LUNC from the Oracle Pool
The question is, (at t+2) will the new LUNC price be normalized to the latest âmoonâ price range to avoid excess (or unfavorable) draining of the LUNC reserves?
(or maybe I have the wrong end of the stick so please fill me in with the details 
)
1 Like
Hi @godoal,
Thatâs a good question actually, so what we are saying is that the âconcentrated liquidity featureâ allows us to provide the amount of liquidity we wish at the price level(s) we wish.
Below is an illustration using the pool SHIB/ETH in Uniswap v3
What you see in blue is the liquidity available at different price levels.
In this case, you have ~1M$ of liquidity split across different price levels allowing trading to generate 2k$/day of fees.
To answer your question:
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We want the âblue areaâ to be dynamic eg. you can imagine the entire âblue areaâ moving left or right depending on price movements (the red line). The market making algorithm is what will control this movement.
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If you trade heavily to move the price (red line) to the left for example, it would cost you a lot eg. youâd have to give us a lots of tokens in exchange (LUNC or USTC that weâd be happy to redistribute to the validators/stackers anyway)
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Moving the price left or right would make the pool arbitrage-able if the new resulting price is not in line with the market price (eg. binance), and in this case, someone will come to arb the pool eg. trade in the other direction in order to bring the red line back to where it should be (in line with Binance, Kucoin etc.)
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Maybe what you meant is: What happens if the price being outside of the range is actually the market price eg. It is not arbitrage-able and it will stay there.
In this case, we should have received a lots of tokens in exchange and if we have some âdry powderâ left we will redeploy liquidity at new levels eg. you will have a new âblue areaâ around the new price level.
The key here is to not spend all our money in a single âblue areaâ to gather for this scenario. Otherwise, if we have no money left and we wish to stop, then we fall back into the âextreme scenariosâ eg. we have only one sort of tokens left (LUNC or USTC).
In this example, SHIB/ETH has 1M$ liquidity and in our case, if we have a total of 10M$ weâd have 9M$ available to redeploy.
Also we are choosing LUNC/USTC so if both LUNC/USD and USTC/USD go up or down, LUNC/USTC is staying at the same price level - tokens with correlated prices help.
Thank you, that makes sense.
2 Likes
Hi @johny ,
I know that you and I have already talked about my concerns personally, but since they are concerns that I do believe the broader Terra v1 governance should consider for project based spend proposals in general, I am outlining them here for others to consider (and so others know, I would mention these for any project based spend proposal).
I believe they enhance the project success of grants given from community pool spend proposals (while still recognizing that in technicality all that is required for a Terra v1 grant is a community pool spend proposal that passes governance). I also recognize that as the proposal author, it is your prerogative to weigh the merits of the proposal discussion comments in determining which comments have the merit of shaping your final proposal.
My main personal concerns are that I believe each project based grant should:
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include a cost analysis or cost comparison (within the proposal discussion - or at least in the comments)
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if the project is Layer 1 code based (and depending on the nature of the project, possibly Layer 2 as well), that it should include a code review, which includes security review as a component, that is factored into the overall price (in this case, in addition to the price you have outlined)
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if the project has a legal or financial impact for Layer 1, to include (arrange for) a legal review as part of the overall process near the beginning of the project (so that it can help the project know where to shift in design if needed, and helps the Terra v1 governance community know any legal implications)(in this case, in addition to the price you have outlined).
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that instead of a block grant, that project grant proposals use a milestone approach.
- Although I do realize that this proposal does provide for some type of review process by breaking up the costs into trenches. Each of the trenches are in themselves sub-projects that can, in a sense, stand on their own as products as long as the previous sub-project exists - so something like this would apply to each sub-project where it is appropriate, unless it the sub-project is near a price point the community feels comfortable with without milestones). Something similar to what was proposed in 10936 (although admittedly for different assets that do not yet exist in the community pool):
- Projects where total funding sought would be equal to or greater than $30,000: It goes through 3 funding rounds based on minimum milestones (this means that the initial round seeking funding would be requested in order to complete milestone 1, which must be completed before seeking funding for milestone 2, etc.):
- 1 ) requirements and design
- 2 ) code complete and test ready (or appropriate project management milestone for any potential non-software development specific aspects toward Layer 1 software development or Infrastructure), and
- 3 ) product tested, reworked, and shipped/accepted/deployed (with appropriate external best practice and security review)
- Projects where total funding sought would be equal to or greater than $30,000: It goes through 3 funding rounds based on minimum milestones (this means that the initial round seeking funding would be requested in order to complete milestone 1, which must be completed before seeking funding for milestone 2, etc.):
- Although I do realize that this proposal does provide for some type of review process by breaking up the costs into trenches. Each of the trenches are in themselves sub-projects that can, in a sense, stand on their own as products as long as the previous sub-project exists - so something like this would apply to each sub-project where it is appropriate, unless it the sub-project is near a price point the community feels comfortable with without milestones). Something similar to what was proposed in 10936 (although admittedly for different assets that do not yet exist in the community pool):
In regards to:
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The cost analysis: I have done an independent rough cost analysis of this project, drawing upon project management experience, and as an independent analysis purely from project management perspective (not taking into account any specific realities that only a Quantitative Analyst would know, or that is specific to your teamâs realities - so this is only a very rough estimate), with the expertise of the talent that your team is listed with, and it does appear to be in line with acceptable standards for:
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Senior Golang Developers ($100 - $180 an hour);
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Senior Quant Developers ($52 - $95 an hour, if working primarily as Senior Dev then the rate for Senior Devs); and
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Senior Quantitative Analysts ($60 - $261 an hour); and
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the standard practice for bonuses for Quantitative Analysis, based on performance or product performance, that are 100% their labor rate.
- I estimated 240 hours a person (although I do know that a good rule of thumb is to take an estimate and times it by 3 to determine the actual number of hours that the project may take).
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In regards to the legal analysis, since this project does have financial legal implications for Layer 1, I would propose an attorney that has international law experience at minimum to review the model and design overview and then write a legal opinion, citing sources, in regards to any securities, commodities, or loan (for the flash loans) implications. The second part of the review would be if these implications are already present in the system as its stands, and which, if any, of these implications may be there as a result of the specific project itself (and any suggestions for remediation of design).
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A copy of the legal opinion made available, where appropriate, to the Terra v1 governance community.
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The cost for legal analysis would be in addition to the cost you have proposed.
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The intent is not to derail or stop the project, but to enable the project to know early on any shifting in design it may need to make, and for the community to understand any implications and any adjustments it may need to consider for the future. It is also not meant to be used as a punitive process, but simply a legal opinion.
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I do realize that these are personal concerns, and again I recognize that no everyone will agree with them, and that as the proposal author I respect your right to shape your final proposal.
Thank you truly for all the time, thought, process, energy, and Quantitative Analysis you have provided already that has culminated in the open source research you presented in your proposal discussion description, and also in your efforts over the past months to find ways to revive Terra v1 along side others.
7 Likes
This is a chicken and egg story, is it not though? First get the legal opinion, but for that you need funds. To get the funds you need a proposal. To get the proposal funded, you need the legal expertise first.
Quite centralized.
1 Like
Hi @Tonu_Magi ,
Thank you. What I was meaning to suggest, speaking generally for project based grant community pool spend proposals, is that the amount for the reviews would be added to the overall cost (and therefore costs they ask for as well).
Since a legal review (as my suggestion) would be something done early in the project (if the project has legal or financial impact for Layer 1), it would fit into the design and requirements phase of the project (if it used the suggested milestones), or at least during the beginning of the project. So the review would be covered by part of the grant finances, in addition to what has been asked for, which as an early process would be in the first spend proposal. That portion was only meaning that the team would coordinate the review, and report back the review (for instance, by posting the review or a link to the review in the proposal discussion, where appropriate). Itâs findings may bring Terra v1 governance to ask about any design changes, or areas that governance should address, to accommodate for the results of the review for the next grant community pool spend proposal for the next portion of the project, and it would also let governance know of any issues they should be aware of in the system legally for current or future consideration, that although the project may touch on, were/are actually fundamental to the system prior to the project.
Similar for the code and security review that was suggested as well (basically validators and community members would know the code has been independently reviewed, and the review reported back, before code delivery phase).
At the same time, I do realize that these are personal concerns. I recognize that not everyone will agree with them. I recognize too, and respect, that the proposal author has the right to shape their final proposal.
I hope you have a great day today
1 Like
When it will go for voting ? Any specific date
Yes, Yes, Yes!!!
Solid proposal.
I would like a bit more background on the developers experience. Bit more info on the types of projects they have done, their testing methodologies, etc.
4 Likes
I like this idea better than some of the other proposals I heard.
Why this proposal is delaying too much ? Is there is issue with it ?
Greetings.
I like it. Because the way a see it, is like telling the oracleâs pool, âi dont want 3 / 4 lunc and 1 / 4 ustc as reward, maybe trade me 1 / 4 of lunc to ustc i pay uâ, which is super nice feature. Worth the risk of playing with oracleâs pool because we have to do something to feed our pools, otherwise game is over.
Try to answer questions as best u can to see if people feel more secure about it.
Bye.
1 Like
First community spend proposal ready, pls cast your vote !
Good work!
1 Like