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Ok my ``preliminary'' ideas re: @VelodromeFi @solidlyexchange are sufficiently congealed that I am starting the process of putting them out on medium. This will be my first medium article so I have to work out how to go from @Wolfram_Alpha to latex to medium. 1/find out as I go
Since I don't have a lot of followers at this point that probably qualifies me as anon. I would appreciate retweets of my medium article 2/undefined
@gabagooldoteth
@jack_anorak
@_veDAO_
@VelodromeFi
@optimismPBC
@epolynya
@toghrulmaharram
@aeyakovenko
@lafachief
@gabagooldoteth
@jack_anorak
@_veDAO_
@VelodromeFi
@optimismPBC
@epolynya
@toghrulmaharram
@aeyakovenko
@lafachief
@CoastalDegen
@ethersole
@MrMojoRisin1966
@alltheway08
I will briefly outline the contents of the article here and I may do a follow-up thread once I have written the medium article. I will start with solid related points and then get to the new stuff. 3/undefined
@ethersole
@MrMojoRisin1966
@alltheway08
I will briefly outline the contents of the article here and I may do a follow-up thread once I have written the medium article. I will start with solid related points and then get to the new stuff. 3/undefined
I do believe that the original idea behind solidly can serve a purpose but ultimately the goal is capital efficiency, not emissions which means that this platform needs to figure out how to fit in an ecosystem that will include uniswap v3 and curve. 4/no idea
I have followed this story fairly closely since AC deployed the platform without planning for a DAO and with immutable solidex because of their confidence that they could get this platform to work without real-world testing 5/however many
That did not last long when first others then @KingsFantom started creating private emission control tokens. AC got understandably upset and labeled them a tax on the community and urged folks with voting firepower to downvote them. When it was clear 6/a bunch
that that was not going to work because of vote flipping, because negative voting needs a community body to be effective, because solidex is immutable and so on AC vanished from the scene. It is important to note, however, that there are other issues such as 51% attacks 7/more
that are of potential concern. I will reserve a fuller discussion of solidly issues for later. Here I will simply say that on many matters my thoughts are much aligned with those of the @_veDAO_ team as discussed here https://medium.com/@vedao.alt/on-solidly-60f6481b26fd
8/?
8/?
I should add however that there are several potentially quite important issues that to my knowledge have yet to be addressed. I will single out a key one because breaking this stuff down into tweets takes a toll and because I want to briefly outline the new stuff 9/+
The issue that I want to briefly address first concerns what one may loosely refer to as voting your own bags first and the protocol second or not at all. While AC stated in his write ups that he believed that the alignment between voting and trading fees 10/>
(lockers receive the trading fees of the pools they vote for) would result in a self-optimized platform the reality of the situation was quite different and there was no clear trend towards optimization taking place. The root cause of this was 11/:
That early emissions control the dynamics of the platform so users simply directed emissions in self-rewarding ways without concern for the health of the platform. To illustrate this without disclosing names I recall one particularly egregious case 12/;
There was discord discussion of downvoting the solid/ftm pool to regain the solid/solidsex peg and direct emission there. Beyond that the community that was doing the voting was not really thinking of optimizing anything. @_veDAO_ proposes to fix this with votium turnkey...
optimizations and by directing emissions to the velo and also with a whitelist. And that is of course fantastic and much needed -- but even more should be done in the early high-emission days to make sure that voting goes to pools that generate actual trading fees...
I do have ideas about how to do that but I will leave them for later because I want to briefly outline novel feedback loop ideas to dampen protocol volatility. I'll start by noting that this platform suffers from some of the same issues that plague rebasing protocols...
such ohm ( @ohmzeus) and ohm forks such as butterfly (I know, not for long @0xSami_ @RealKinando but up to this point anyway) which is that protocol dynamics readily lead participants to the schelling point of farm and dump in a cycle driven by the epochs...
This behavior leads to the ``toxicity'' of the LPs such that the price dynamics are no longer a random walk but can be better classified a punctuated equilibrium with jumps. Naturally this is not a pleasant behavior for liquidity providers since it doesn't give enough time...
for trading fees to catch up to IL losses (this has been noted by @0xdoug recently) but it is also pointed out in the literature (When does the tail wag the dog? archive). The gist of it is that in stable swaps low curvature trades give profit guarantees but when information...
provides a trading edge then one can get in some trouble with LPs. So the question is how to 1) make the token dynamics self-correcting and 2) complete the dynamics sufficiently that trading will again result in a random walk with no obvious arbitrage opportunities...
This is the main topic of my upcoming medium article. My ideas are in the vein of the ve ecosystem with boosting pioneered by @CurveFinance but I also want to treat the pools as an n dimensional phase space system to introduce entropic ideas. I will also introduce adversarial...
dynamics to increase user engagement and provide the necessary ``particle interaction'' dynamics to drive the system towards a local equilibrium. This is somewhat akin to what @THORSwap does with their incentive pendulum but by turning it into an adversarial hunt for the...
optimal yields we aim to encourage locking during downturns and readjustment of the emission fractions that are directed towards pools vs lockers, even in the absence of a bribing mechanism. The adversarial part means that 1) the system becomes difficult to analyze...
so it will make it difficult for participants to settle onto an obvious schelling point (this is a feature not a bug) and 2) it also means that the incentives for degen lock-during-downturn behavior do not come at the expense of additional protocol inflation...
The aim of course is to damp volatility and reward ``faith'' with an pools vs lockers plus an adversarial hunt for boosted yields approach. Again if that is not easy to analyze precisely because it combines player interactions with the protocol design that is very much a feature.
Ok if I get enough retweets for this stuff I will definitely be incentivized to spell it out even further :
@guil_lambert
@tarunchitra
@nik_hayes
@0xHamz
@0xSami_
@ohmzeus
@gabagooldoteth
@VelodromeFi
@_veDAO_
@lafachief
@ethersole
@guil_lambert
@tarunchitra
@nik_hayes
@0xHamz
@0xSami_
@ohmzeus
@gabagooldoteth
@VelodromeFi
@_veDAO_
@lafachief
@ethersole
