/biz/ - Business & Finance

it needs more liquidity

>>19202165
You are the worst kind of zoomer. Born with all the benefits and luxuries of the internet. But still can't google that shit. Do better anon. Better yet, ask a pointed question instead of asking us to feed you tendies.

>>19202165

Normies love easy shit and unicorns.
buy early and expect 10x.

How does price appreciate without order books?

>>19202165
If you provide liquidity you get some dollar dollar sign from fees, that is if you put in at same price as you take it out

>>19202248
Liquidity pools. Look it up.

>>19202224
>>19202165
you're right, im sorry.
OK how about this: plz redpill us on "impermanent loss". Guys at Bancor and many other teams claim to solve it, eg https://cointelegraph.com/news/bancors-upcoming-v2-upgrade-to-solve-defis-dirty-little-secret , but the lead guy from Uniswap, Hayden, says it's never truly solved: https://twitter.com/haydenzadams/status/1255584208631861250?s=20

>>19202248
add liquidity - 10 eth and 1000 link (assuming link is at 0.01)
some fag buys 10 link
this ratio has to keep same:
10 * 1000 = newEth * 990
newEth = 10000/990
newEth = 10.101

something like this

>>19202268
>>19202313
So price is dictated by liquidity/volume rather than what the two parties are willing to buy/sell it for? Seems like this approach woudlt fair well in a bull run or ever allow one to begin

>>19202304
impermanent loss is the "loss" you have providing liquidity vs just holding the underlying assets. Your liquidity is constant, so if the price goes sideways for a while you rack up fees and your underlying assets don't appreciate or depreciate in value. This is a net positive.

However, if the price of one of the assets increases due to buy orders, your equation is rebalanced in favor of the other asset (meaning you have less of the asset that is rapidly appreciating) If there isn't a lot of volume then the fees you get won't cover the "loss" you experienced in profit that you could have had if you were just holding.

TLDR: its good if market crabs, bad if it raises a lot or crashes a lot. It's called impermanent cause if you get back to your original entry point you come out with the same amount of underlying assets+fees.

>>19202165
>dexes: while trades are onchain sec sends letter to makers and ethdelta/idex=dead
>uni: liquidity pool where algo turns shitcoins swaps into bids//asks and finds price, sec sends letter to makers nothing happens because its truly automated and decentralised
So tldr?
Uniswap is piratebay for shitcoins today and piratebay for EVERYTHING (nfts, tokenization) tommorow

Its single most bullish thing eth pooped out (yes more than icos and defi) and somehow noone is mindblown true proof of clownworld

>>19202506
interesting. thanks a bunch anon.

Do you think impermanent loss is an overly euphemistic name for what's going on? "Impermanent" made me think it was temporary and therefore no big deal. but based on what you said, it seems the opportunity cost of using Uniswap liquidity pool vs. just holding your crypto could be massive (ie. you could miss out on tons of gains by using liquidity pool)?

Uniswap is the killer app of ethereum

>>19202248
it's using price oracles. not chainlink of course, because uniswap is a decentralized project.

>>19202584
>"Impermanent" made me think it was temporary and therefore no big deal.
It's impermanent because it goes away if the exchange rate returns back to where it was when you started providing liquidity.

>it seems the opportunity cost of using Uniswap liquidity pool vs. just holding your crypto could be massive
Sure, but markets don't exist if no one makes them.

>>19202584
its a massive deal, it depends on the price point that you provide liquidity at. Imagine, for example, you are providing liquidity to eth/USDC when eth was just launched at around .14c or something. Eth is now at $200. You would have had a massive loss in the amount of eth assets you would have held as more and more of the equation got rebalanced towards USDC. If you had just held all your eth originally, you would have made a shit ton of money. But now, you have less eth (much less, dont feel like doing the math) and more USDC+fees. For this guy, providing liquidity early on was a massive downside.

Look at the other example. Eth is now trading at 200 bucks. You provide liquidity to eth/usdc at the current price. IT crabs around 180-210 constantly. Your assets depreciate, but then they reappreciate. If this crab continued for a while, you would make money on fees while the "loss" you experienced isn't that much. This is a more attractive scenario and the "loss" isn't that bad cause the price swings within a narrow band. However, if eth continued to rise and broke 500 or something, it would turn into another bad deal for you.

Generally speaking, the fees aren't really ever enough to cover price appreciation unless you've been getting a high volume crab for a very long time before the price goes up.

>>19202506
I don't get why this is a problem. If you're offering your asset to the liquidity pool, aren't you essentially entering a "sell order"? If someone buys it and price goes up, why shouldn't you have less of the asset? Seems like you're just on the wrong side of a trade, like literally half the people making trades at any given time.

>>19202224
google is shit
duckduckgo is king

>>19202782
>Imagine, for example, you are providing liquidity to eth/USDC when eth was just launched at around .14c or something. Eth is now at $200.
How is this different than saying "I would have had more money if I had sold ETH at $200 rather than 14c"?

>>19202948
that's the point. These people are trying to help a market grow, and now they are losing out on money they could have had if they didn't help the market grow. Why can't you see how this removes incentive to provide liquidity for market makers if they feel the coin will appreciate/depreciate in value? Would you in this situation rather have held onto your eth or provided liquidity and come out significantly poorer?

>>19203013
I would rather hold my ETH but that's because I'm a permabull. Anyone who thinks ETH is overvalued at $200 should be happy to provide liquidity, just like they should be happy to enter a regular sell order. If no one thinks ETH is overvalued at $200, price should go up. What's the problem?

>>19202165
uniswap2

advantages
allows for token-token pairs (like dai/usdc) - this is going to be great for liquidity
adds twap price feeds (kills link for all prices for tokens that trades on uniswap)

disadvantages
higher gas costs for eth pairs compared to uniswap1

>>19203013
Thats not problem " losing out on money they could have" is saying you can time tops and bots also marketmakers dont "feel the coin will appreciate/depreciate"

You provide liquidity usdc-eth

Eth moons you still have half eth that mooned and you have oportunity cost for half of eth stack
Eth crabs/goes a bit down you bank on fees

You make money either way longterm you just hedge bets so its not win/loss scenario but half win//small win scenario

this is literally market making 101

>>19203137
Yes because we are poor

Market making is for rich to make moneny whitout making bets

I think the better alternative to uniswap is https://mesa.eth.link
it's a dex that works by organizing a batch auction every few minutes.
The biggest problem with uniswap is frontrunning and mesa solves this.
It was made by gnosis and it's also 100% decentralized.

>>19203137
now you understand though, there isn't anything "wrong" but you are 100% never going to provide liquidity. Anyone who is bullish on a token will not provide liquidity. People are more inclined to remove liquidity when they start to see long term bull potential. The point is that it adds risk to a market and makes people less likely to participate in the market for that coin.

RPL is a great example. biz had a MASSIVE pump in rpl, bringing the price from below a dollar up to 3.50. one of the whales saw the massive price appreciation and withdrew all his liquidity to the tune of 1 million dollars withdrawn. the liq pool is around 250k now. It's an isolated example, but you can see that overall it is an issue for a lot of people. If it was solved, people would be able to participate in market making while earning fees at literally zero risk to them. It would make DEXs have ridiculous liquidity and they could compete with major exchanges. I don't think it's solveable atm though...AFAIK the solution from bancor involves just giving you tokens that you can sell to cover the impermanent loss.

>>19203330
it's a problem because people don't participate then, jesus. You make money either way, but you *could* have more. That possibility makes providing liquidity unattractive to most people.

>>19203464
Market makinng is not for moss people mm is for rich to make moneny whitout making bets so yes.

Its not maximize profits poorfag job its keep fat stacks and make them grow job

You could lend a stable coin on aave to earn 3-4% apr if you don’t want to miss out on potential gains with eth or other shitcoins

>>19203612
Yes and you can earn literally 3-4x more during hi volume but crab periods mm shitcoins on uni thats the point of defi use all platforms hedge your bets

>>19203424
>>19203013
this thread has been very helpful. thanks anons.
the biggest issue appears to be:
>"These people are trying to help a market grow, and now they are losing out on money they could have had if they didn't help the market grow. Why can't you see how this removes incentive to provide liquidity for market makers if they feel the coin will appreciate/depreciate in value?"

it's a shame that people who are bullish on crypto and want to see the community grow are disincentivised from providing liquidity

>>19203681
God damn defi is exciting

>>19203424
>but you are 100% never going to provide liquidity
I don't think that's true, I would gladly provide liquidity for ETH once it's trading over $10,000.

But I guess I see what you mean. If you have a sell order at the current price on a CEX, it doesn't make sense to provide liquidity to Uniswap instead because if it dumps you would have been better off selling all rather than keeping some and earning fees.

>>19203725
>I don't think that's true, I would gladly provide liquidity for ETH once it's trading over $10,000.

Yes because at that point you want to grow your "fat stack" but not gamble anymore same as guy who holdes 5k eth today and thats mm in nushell and reason someone will allways provide liquidity

>>19202165
>>19202304

Uniswap copied Bancor. Now Bancor V2 is about to show why they are the true AMM liquidity pool OGs. Stay tuned frens :)

>>19203824
Question: what's wrong with low liquidity? I don't need lots of liquidity for my $200 trade.

>>19204394
More trafic more fees from mm perspective no?

>>19202203
It launched yesterday anon. Will take sometime for people to transition over

>>19204065
Bancor V2 is gonna be lit af. I can provide LINK liquidity without having to provide the other side of the pool and not auffer impermanent loss. Bancor is the next Aave if DeFi in that its integration with Chainlink plus unique features will help it explode in value.

>>19203424
Impermanent loss happens only when one of the tokens in the liquidity pair strays too far from the ratio that you got in with. So it either moons hard or dumps hard. You can make money being a liquidity provider during crab markets OR if you are bullish on both tokens in your pair and think they will both go up eventually at similar rates. Or if one moons, some time passes by and another one catches up.

The only goal is to get in and get out with a similar ratio. The more volatility that happens between those 2 points the better because that means more fee collection for you.

uniswap v2 as a price oracle is the best fud i’ve seen for chainlink. their prices are all completely onchain and don’t need external data

>>19202165
Never fucking moving my coins off v1

>>19202611
Well, v1 is v2 is shit.

V2 is for reddit now fuck off.

>>19202165
Are there any other platforms to list directly without having to put up a pool?
Forkdelta, Saturn Network. Anything else?

>>19203391


it's also a dxdao product !

Where can I list a torken directly with the contract except fork and saturn network?

>>19204757
How about this strategy:

>You think your shittoken is overvalued temporarily and in for a dump. Short term bearish
>Long term bullish
>supply liquidity
>wait for correction
>remove liquidity after correction

You're left with more of your shittoken + trade fees you accrued in the meantime. Essentially you let the market pay for you to rebalance your portfolio, and you don't completely miss out in case you were wrong and your shittoken goes on a tear. In this case, being an LP hedges your bets between wanting a price decline so you get more shittoken, and the possibility its price doesnt go down

>>19202165
good starting place for altcoins

>>19204816
except it ONLY works for crypto data, which Chainlink is kind of ambivalent to. Only smartcontracts that need crypto data exclusively benefit from uniswap, whereas everything else (all offchain data in the world) requires link or something like it to be used by a SC.

>>19205126
Good point. If you're bearish short term on a token but bullish long term, being a liquidity provider also makes sense.That is if you want to have somewhat of a hedge in case you're wrong.

>>19205264
for sure, there’s plenty that lies only in the scope of chainlink right now. still, price feeds were supposed to be an early killer app.
uniswap does seem prone to certain kinds of manipulation, especially pairs with less liquidity. theoretically though, any kind of data that could have a market created for it could be completely onchain

anon, that's not how bancorv2 will resolve impermanent loss. everyone is speculating on the solution, and uniswap founder is fudding it, say its not possible, but it is. bancor has done it. and it involves using mirrored assets in a pool and some other genius chit. they hint at their solution in this blog. https://blog.bancor.network/beginners-guide-to-getting-rekt-by-impermanent-loss-7c9510cb2f22

if they have resolved impermanent loss, which is highly probably given that bancor literally invented defi and automated market makers, it means that liquidity is going to flood into bancor pools. uniswap will be drained. they are scared, which is why they are fudding. espcially because uniswap v2 doesnt resolve impermanent loss at all. liquidity providers have 0 incentive to stake on uniswap. too much risk to put in big capital if when i remove it i could lose out. not worth it.

also, bancor v2 enables 100% single token exposure. so if i stake ETH and only want to be exposed to ETH then i can do so. U cannot do this on Uniswap, or any other AMM.

This is a massive significant change for defi.

BNT is badly undervalued and lots of big players are calling that out all of a sudden. https://twitter.com/bancor/status/1261046143368204288?s=21

>>19207230
what nonsense, their design is frontrunnable. Essentially they use oracles to 'correct' the prices internally.
They assume from the start that the 'real' prices are on external exchanges and dexes are insignificant.
This doesn't work at all for new tokens, and is going to fail beautifully for tokens that are illiquid on external exchanges. I can't wait.

>>19203424

anon, that's not how bancorv2 will resolve impermanent loss. everyone is speculating on the solution, and uniswap founder is fudding it, say its not possible, but it is. bancor has done it. and it involves using mirrored assets in a pool and some other genius chit. they hint at their solution in this blog. https://blog.bancor.network/beginners-guide-to-getting-rekt-by-impermanent-loss-7c9510cb2f22

if they have resolved impermanent loss, which is highly probably given that bancor literally invented defi and automated market makers, it means that liquidity is going to flood into bancor pools. uniswap will be drained. they are scared, which is why they are fudding. espcially because uniswap v2 doesnt resolve impermanent loss at all. liquidity providers have 0 incentive to stake on uniswap. too much risk to put in big capital if when i remove it i could lose out. not worth it.

also, bancor v2 enables 100% single token exposure. so if i stake ETH and only want to be exposed to ETH then i can do so. U cannot do this on Uniswap, or any other AMM.

This is a massive significant change for defi.

BNT is badly undervalued and lots of big players are calling that out all of a sudden. https://twitter.com/bancor/status/1261046143368204288?s=21

>>19207417
love that u think oracles are the entire solution. its not at all. some deeper chit going on here. uniswap is about to get rekt by bancorv2. i can't wait.

>>19207470
there's no 'deeper chit'.
>This new type of AMM effectively relies on oracles to balance prices, rather than relying exclusively on arbitrageurs.
It's very simple. It's equivalent to arbitrageurs on uniswap transacting and then distributing the profits to liquidity providers. It's fundamentally unable to deal with tokens that trade primarily on dexes and is going to be frontrunnable. I can't wait to, this should be easy to exploit, assuming there's any liquidity.

>>19204757
I said that in my previous posts

>>19204394
Low liquidity also means bigger price slides and slippage

>>19207631
simp u r wrong. just relying on an external price oracle to set the internal pool price isn't much of a solution, is it? there is definitely deeper chit.

>>19207425
>Through an integration with Chainlink price oracles, Bancor V2 enables the creation of AMMs with pegged liquidity reserves, which hold the relative value of tokens in the AMM constant. This new type of AMM effectively relies on oracles to balance prices, rather than relying exclusively on arbitrageurs. In doing so, they are able to eliminate the risk of impermanent loss for both stable and volatile tokens.
So they're gonna use chainlink to make mm profitable on GHOST tokens? I'm in.

>>19208390
This is the next one and it’s on v.1 no slippage price good liquidity

>>19202782
So wait wouldn't XRP and Doge be perfect for Uniswap liquidity? they're coins which did nothing but stagnate for 7 years.

>>19208422
This is it anons. Next 10 x

>>19208608
https://v1.uniswap.exchange/swap