Jump to content


  • Posts

  • Joined


Recent Profile Visitors

The recent visitors block is disabled and is not being shown to other users.

jn_r's Achievements

  1. Why should there be? The only thing that needs to be true at all times is the formula x*y = k (where k = constant and x and y are the total liquidity amount of the 2 assets) if someone makes a trade (he adds an amount 'a' to x) then the following must hold true: (x+a)*(y-b) = k where b = the amount the trader receives back. If you know x,y and k you can calculate b. It is this basic principle how AMM's work. As you can notice it is logical that if 'a' is a small + or a small - amount, that it will lead to about the same amount of b you receive back or have to pay ... Hence that is the about the same price - no spread. The buy/sell will shift from each other as the amount of 'a' becomes bigger. In practice however there is a difference. For every trade an amount of 0.030% is held back from the amount 'a': This is profit for the liquidity providers - it is simply added to the amount of x. And this does lead to a difference in price if you do a buy or a sell, namely a price difference in total of 0.06%. To be completely precise 0.005% is held back for Uniswap itself, so only 0.025% per trade is added to the pool. For another explanation, see e.g. https://docs.uniswap.org/protocol/V2/concepts/protocol-overview/how-uniswap-works
  2. I would say the AMM has only 1 dotted line, where it moves to the left or to the right depending if someone bought or sold. The buy and sell price are the same. Or at least they start from the same position. Due to the curve where an AMM price moves on, the price becomes worse as you trade a larger amount. The risk is in that case more with the buyer/seller than with the liquidity provider. And as said, when the price is back to its original position (arbitrageurs will make sure it will get back to market position - that is how you can make arbitrage money with an AMM), you - as liquidity provider - get the same amounts back as what you put in (plus the 0.025% per trade extra) - I think if you combine orderbook based with AMM, then you might see AMM pricing indeed happening between the 2 dotted lines .. if it gets outside the lines, then there is a new type of arbitrage opportunity (buy from order book, sell on AMM)
  3. Yet it is. Not saying you are getting the best price. Let's say that with an AMM someone swaps a lot of asset A for asset B. As a result the price in the AMM shifts - B gets more expensive, or A gets cheaper. That new price is good if you want to buy back the asset A. But that same price is bad if you want to sell more from asset A. Yet both prices are the same, there is not spread ... Then there is the impermanent loss thing. I would argue that it is misunderstood by about 95% of all people who claim to understand it. Just imagine that like in the example above we have an AMM pool with 2 assets A and B. And you provide liquidity by adding an amount of A and and equal value amount of B. Now, In the case that someone else buys asset B for asset A, that will make the price change. Some would argue that that change leads to impermanent loss. But now, yet again someone else does exactly the opposite, he buys the same amount asset A for asset B. Some would argue that that would also lead to impermanent loss. But how can that be? Because the end result is now the same as the begin result. There is no profit and there is no loss, so either in the first case you would have had a loss and in the second case you would have a win, or vice versa. But not in both cases an impermanent loss. The explanation for this phenomenon is psychological, the assets should be viewed in a relativity to each other (yeah, like Einstein ;-)). Somehow people always see the lost opportunity. But in fact, Impermanent Profit occurs just as much as Impermanent Loss.
  4. I'm trying to find some simple documentation that shows how the routing basically works, but that's not easy without ending up in the code.. I found this page however where they explain some of the new routing that they offer. The pathfinding search engine is off-chain, but the execution is atomic on-chain. If the execution results in a lower than expected offer, then the transactions fails and is not executed. https://uniswap.org/blog/auto-router/ I think you could argue that pathfinding helps you find the best sources of liquidity, but in essence by executing an order you are per definition not making market, but taking market. Which - if no new market is created - results in an hollowing out of the order books, which then leads to a market with bad large spread between buy and sell. And that is one of the advantages of AMM, there is always an accurate market, it does not depend on others filling the order books with new offers, there is not a spread between buy and sell. Which makes it a good fit for ledgers that cannot handle many txps. In the end I do think that order book based is better than AMM (if the ledger can handle many txps - so accurate offers can be made and changed). But combining AMM with Order book based (and use path-finding over that) will give us best of both worlds and possibly even more.
  5. imo that's not entirely correct. With an AMM the market making part is automated, i.e. no orders have to be (re)placed. This is not the case with order book based exchanges like XRPL's DEX, on those type of exchanges somebody needs to place orders to make the market. Also, on the Ethereum chain AMM's can be placed in a row. For this part you do need a pathfinding algorithm, which Uniswap has built in. In practice this boils down to a chain like Asset A -> USDC -> ETH -> Asset B with some variants in the USDC and with or without ETH. It's not as sophisticated as XRPL pathfinding, but it is possible. If you want to manually define a custom path, that is also possible, it can be as long as you want. All in all, Pathfinding is not AMM
  6. Curious if the term 'Spark' will remain, isn't it nowadays the network being named "Flare Network" and the token named "Flare (FLR) token"?
  7. Alex Dupre mentioned a fix in the discord (https://discord.gg/uFd8gt33): I can repost a clickable link here, but I would encourage to pick up the link from discord, as it is coming from Alex Dupre himself. I tried it out and it worked. Maybe the 'official' link works now also in the meantime..
  8. Thanks! That's a nice overview, hadn't seen that yet. Still wondering if an oracle must provide price for all these assets, or if he can decide to be oracle for one or perhaps a select group of assets. Checking on FTSO.au it shows only 9 assets vs the 10 in the flaremetrics overview (ETH missing ?) Maybe that is cause for the differences in yield?
  9. is there an overview of for which assets the FTSO oracles are providing price? I wonder if they set a price for SGB already, is it traded anywhere yet?
  10. Aggregation of orderbook based liquidity with AMM liquidity might have some real benefits. Specifically at small-caps and moments of high volatility when the order book is hollowed out, AMM will step in to create market at those moments. And a new arbitrage playing field where AMM liquidity is exchanged for order book liquidity.
  11. I'm just following the hearing cause nothing better to do Another juicy adjustment: If you are really bored (like me) you can watch the senate live here: https://www.senate.gov/legislative/floor_activity_pail.htm
  12. Just recently watched 'House of Cards' on Netflix, this is just like it, so realistic
  13. Crumbs, left to be picked up by us little birds
  14. Apparently the liquidity providers on XRPLedger (those that buy JED's XRP in exchange for Bitstamp.USD) buy their USD on Bitstamp. It seems logical. I never noticed it but seems logical. So the liquidity providers (check the top accounts on https://xrpcharts.ripple.com/#/active_accounts orderbook Bitstamp.USD/XRP for their XRP addresses) do this, in a few cycles: buy USD on Bitstamp exchange using XRP withdraw USD from Bitstamp-exchange to XRPLedger place order Bitstamp.USD / XRP on XRPLedger (they can actually use the price they got from the trade on the Bitstamp-exchange) exchange some of Jed's XRP deposit XRP back to Bitstamp-exchange restart cycle This way the XRP is exchanged on the XRPLedger. It could more easily be done directly on Bitstamp, so the reason why it happens on XRPLedger might be interesting and have something to do with either a matter of principal or perhaps more probable, to avoid regulatory difficulties
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.