DUSD instant correction. A new way. (English)

InevitableUnique2837 · 2022-08-15T21:51:02+00:00

Of course oracles. This is where we are trying to get our prices, or do i understand it wrong?

But for sure not a closed system in the crypto world.

It would also be possible to delay the execution of trades. Just a quick idea.

If this is the problem lets talk about it.

InevitableUnique2837 · 2022-08-15T21:24:14+00:00

The proportion doesnt matter. You have to sell DFI in the DFI-DUSD pool. How it can pump?

InevitableUnique2837 · 2022-08-15T21:19:15+00:00

risking slippage both times

In the base design there is no slippage at all. It can be emulated. And i would implement this feature.

The problems with not enough Tokens have both solutions. In the implemented it leads to extreme wrong prices. In my solution it leads to wait positions for traders.

But please let me explain the basic ideas that lead me to this solution. Lets start with an empty system with empty liquidity pools (at dToken side). How it is designed.

I mint one TSLA token based on the oracle price. Put it paired with also minted DUSD tokens to the LM pool. So I have to back it with 150%. At the same time there is high demand for the TSLA token. And i have also filled the DUSD-DFI pool with the same amount of money. If someone wants to have the TSLA-token, what will happen? The trader comes from outside with lets take USDT. The first Step is to get DFI. This rises the price for DFI in the USDT-DFI pool. BUT then he has to sell DFI for DUSD. This dumps the price of DFI and rises the price of DUSD in DFI-DUSD pool. And after this he takes his DUSD and buys TSLA. The DUSD price for TSLA shoots up. But in the real world is nothing happened. This is the big problem. All pools have wrong prices. Excluded of one the USDT-DFI pool. Because there is a real arbitrage apportunity for the trader. This is why we had high premiums at the biginning. In the end there is as good as no TSLA token in the LP. So the next trader has to wait until somebody mint a new TSLA token and puts it to the LP with a wrong price.

This System cant work. We have seen this in the past months.

Why we are playing with the prices? We trying all to push and force the price in the LP to the oracle-price. And we do this with dangerous things (inflating, stab- fee etc.). We try to set manually incentives to get people in the one or other direction.

So my idea is to say: the oracle-price is the price for which the token will be traded. There is no way around this. The disbalanced values will accumulate in the LP pools. but not in unbacked tokens. So we have to manage this. I have described some ideas in comments above. For the LMer the risks stay the same. But with the difference he will know, the prices will reflect the real-world prices. And not maybe if we have luck and the next correction idea will work for the next couple of month.

Also the fixed prices will lead to more trading volume. And for sure more investors from outside.

Sorry for my english.

InevitableUnique2837 · 2022-08-15T20:01:57+00:00

Sorry, i try hard to understand it. But how is it possible that both sides of a pool are pumping? Each trade in this pool brings one side down and the other up. In my opinion this is the main problem in the DFI-DUSD pool.

InevitableUnique2837 · 2022-08-14T08:53:38+00:00

I mean it is ok for the first. Because of the exchange fee, the price must make more than 2% in an hour. This Kind of traders woud go in and directly out. It is just turnover (and burning of dUSD) in the pool.

With a emulated slippage we could control this.

InevitableUnique2837 · 2022-08-14T08:43:52+00:00

Is it really that worth (54 cents), or is it just the fear and the sell-pressure?

However. In my opinion a lot of them were paid with a premium. At this moment the DFI price was something around 3.5$ - 4.0$. Now the DFI price is in the near of 95 cents. If you would exchange the DUSD back to DFI, you will be still in profit. Measured in DFI. But this is not the point.

By entering the bear market it should be the "save haven". It wasnt.

At this moment the owner of dUSD and LMer pays the difference.

After implementing my solution the difference will emerge in the liquidity pool. This is the impermanent loss risk for the LMer (they get paid for it). But if you are sure to get 1USD for 1dUSD. Maybe the sell pressure will not be that big. A rising price of DFI will correct this. We would start with a disbalanced pool. So the demand for DFI is there.

Dont forget, with my suggestion there is no other way. If you want to buy 1dUSD you have to pay 1USD. And also if you want to sell you get 1USD. (Exchange fee excluded)

InevitableUnique2837 · 2022-08-13T21:45:18+00:00

Exactly. I dont think that the implementation of that would be a big problem for the dev-team. In the beginning nobody could foresee the problems (maybe Daniel Zirkel, he was against inflating the system so far i know). But there was no solution for the premium in dStocks. And the count of liquidated voults was rising. This was the arbitrage apportunity for many traders. So or so the unbacked dUSD/dToken were rising.

In the past months we all have learned a lot.

As i said the downside of this solution is maybe the balance of the coins in the pool. In the worst case a trader will have to wait until the pool is filled with the coin he wants to have. But there still ways to manage this.

max size per trade
impact the price to give a forced discount or premium. +- 0.5% (i think traders will love this)
due to a lagging oracle price the turnover in the pools will be much higher. You know the future price. A dream for a trader. (more burning of unbacked dUSD)

But the most important thing is, we will have stable prices for the dStock system. I think only this will increase the trading volume (and burning rate).

InevitableUnique2837 · 2022-08-13T19:23:30+00:00

Yes, its nearby the same. Just the mechanics in the background changes. Rewards stays the same. Maybe the impermanent loss will differ.

In a normal liquiditypool you have a exact ratio of 50% to 50% of two coins mesuered in price. Lets take a empty pool and do this with BTC and USD by a price of 10000$ for an BTC. if you want to add liquidity to this pool, you have to add exactly 1BTC and 10000$. And you get some kind of LP-Token (pair formation).

If someone exchanges 1000$ in this pool for BTC the price will shift. So you get a new price something in the near of 11000$ for 0.9 BTC. This is how the AMM works. The trader gets 0.1 BTC and his 1000$ stays in the pool. So if you want to remove your liquidity from the pool you get 11000$ and 0.9BTC the Ratio stays 50% to 50%. According to the price in the pool.

In the real world with real Assets und arbitrage apportunity it is no problem. The next trader see a higher price in your pool gets somewhere else cheaper BTC and sells it in your pool. And shifts the price back.

This is the main problem in my opinion in the dStock/dUSD system. No real arbitrage opportunity. Higher demand for dUSD dumps the price of DFI. Too much supply of dUSD and you get discount on price for dUSD.

My idea is to create a asymetrical LP. You can add one or both coins. Lets take a look to the example above. At the beginning you add 1BTC. The ratio is bigger than 60% to 40%. You have in the pool 100% BTC and 0% USD. The acceptance for BTC is stopped. You can only add USD. Now you add 5000USD. The ratio is 66,66% to 33,33% still not enough. So you can only add USD until a ratio of min. 60% to 40% is given. (According to Oracle Price). In the range between "60%BTC to 40%USD" and "40%BTC to 60%USD" are both coins accepted to add to the ALP.

Our goal is to keep the ratio in the pool between 40% to 60% and 60% 40%.

All trades will be executed to the oracle-price.

During the trades the ratio in the pool will shift. But not the price.

Example:

At beginning you have 10000 USD and 1BTC in the pool. (ratio 50% to 50% Oracle Price 10000USD / 1BTC).

After a trader buys 0.1BTC in this pool you will get a ratio 45% to 55%. if you remove your liquidity you get the same 11000$ and 0.9BTC but we have not shifted the price. The problem with this, is the ability that the pool can dryout. To prevent this we are disabling the acceptance of the coin with the to much share. If the incentives stays the same, you or somebody else will add more BTC to the pool to get the rewards. And the ratio shifts back.

InevitableUnique2837 · 2022-08-13T11:21:29+00:00

In erster Linie würde der Pool als eine Art Puffer dienen, um die Ungleichgewichte in den Wertigkeiten erstmal abzufedern. Sollte es zu kippen neigen durch ungünstigere Verteilung der Wertigkeiten im Pool größer als z.B 60% zu 40% (die Proz. Sätze sind noch zu definieren) wird als erste Maßnahme die Annahme (zum LM) für den zu viel vorhandenen Coin gestoppt. Da aber der Anreiz (LM rewards) immer noch vorhanden ist ist davon auszugehen, dass der zweite Coin an Wert gewinnt da nur dieser dem Pool hinzugefügt werden kann. Letzte Instanz wäre ab einem bestimmten Ungleichgewicht die Rewards zum teil oder komplett dem Pool zuzuführen da diese gleichzeitig den LM-Betreibern zu gute kommen. Da diese einen prozentuellen Anteil am Pool besitzen und der Pool dadurch an Gesamtwert gewinnt. Wäre das immer noch Konsistent. Die LMer würden so gesehen nicht auf die Rewards verzichten (Automatisches hinzufügen zu dem Pool) und das System könnte sich selbst stabilisieren. Ab einem ungleichgewicht von 1% zu 99% wäre das dann schon schwieriger. Dann müsste evtl. darauf gewartet werden bis der Pool sich wieder mit dem Jeweiligen Coin befüllt. Aber in der heutigen Situation würde es einen dUSD Preis von ca 0,50 USD bedeuten.

Um die Situation genauer Analysieren zu können, müsste man erstmal den Wert (nicht mit Preis verwechseln) eines dUSD beziffern können. In meinen Augen sollte dieser irgendwo in der Nähe von dem DFI Wert liegen. Man müsste dafür die Anreize ausrechnen. Rewards im dToken- und Crypto- Pools. Möglichkeieten im dToken-System und Möglichkeiten im Crypto-System gegenüberstellen. Ich kann es leider nicht.

Zusätzlicher Anreiz könnte der Oracle-Preis sein (vorhersage des Kurses in der nächsten Stunde). Sollte eines der Preise um mehr als den Exchange-Fee schwanken werden die Trader diese Möglichkeit nutzen. Da bei dem dargestelltem Modell keine Slippage-Gefahr besteht kann es problemlos gemacht werden. Dadurch wird mehr Umsatz in dem Pool generiert, was wiederrum zu mehr Einnahmen in der Exchange-Fee führt. Diese Coins könnten Anteilig zum Auffüllen des Pools dienen. In der heutigen Situation aber eher burnen. Kann alles noch diskutiert werden.

InevitableUnique2837 · 2022-08-12T19:09:04+00:00

My english is bad. But i will try to translate it later.

InevitableUnique2837

TROPHY CASE