Jump to content

APEX: David Schwartz compares Eth and XRPL


Recommended Posts

Regarding these AMM's methods discussed by @JoelKatzat the end have never set well with my gut. The impermanent loss risk, and just the scratch and sniff test have kept me away from participation.

My gut says "Orderbooks are a better method" especially within the framework of XRPL. I get the sense that the unsaid thing @JoelKatzis hinting at in the end (the thing reducing the losses liquidity providers give up to arbitragers) is the Pathfinding functionality. A hidden Routing gem of functionality at the core of XRPL.

Again Regarding the AMMs, until one can provide one-sided liquidity (like a Bid or Ask on an Orderbook) my gut says these AMMs are not an elegant solution.

Edit.

Starting at mark 47:20 Matt does a good job at introducing the ultimate solution which is the "LP" liquidity provider, then backs off as if he dosent understand Quality in/out (he does understand)... this is a much better solution than an AMM hands down.

Also, Pathinfinding & Autobridging are Atomic, multi hop TXs within a single ledger close.

 

Edited by KarmaCoverage
Link to comment
Share on other sites

9 hours ago, KarmaCoverage said:

Regarding these AMM's methods discussed by @JoelKatzat the end have never set well with my gut. The impermanent loss risk, and just the scratch and sniff test have kept me away from participation.

My gut says "Orderbooks are a better method" especially within the framework of XRPL. I get the sense that the unsaid thing @JoelKatzis hinting at in the end (the thing reducing the losses liquidity providers give up to arbitragers) is the Pathfinding functionality. A hidden Routing gem of functionality at the core of XRPL.

Again Regarding the AMMs, until one can provide one-sided liquidity (like a Bid or Ask on an Orderbook) my gut says these AMMs are not an elegant solution.

Edit.

Starting at mark 47:20 Matt does a good job at introducing the ultimate solution which is the "LP" liquidity provider, then backs off as if he dosent understand Quality in/out (he does understand)... this is a much better solution than an AMM hands down.

Also, Pathinfinding & Autobridging are Atomic, multi hop TXs within a single ledger close.

 

I've been farming the past few months and I agree. I look for pools that meet my very specific risk and reward conditions - I think the return on most of them doesn't compensate you enough for the risk.

Orderbooks are a much better system, that's why Wall Street uses them. The only problem is that trading order books requires skill. AMMs have been such a success because they've gotten people who can't trade off the sidelines and using their funds to contribute liquidity to the ecosystem.

Perhaps a compromise if the XRPL has a smart contract side chain is AMMs that translate their liquidity curve into bids that they place on the XRPL DEX. That way you get the maximum efficiency and utility of order books but still give schlubs like me who can't trade a way to participate.

Oh man. Looking at it that way, AMMs evolved specifically for the conditions in distributed smart contacts. The code has to be simple, because it's expensive to run code on the ledger. I think the future for the XRPL isn't to copy the simple formula-based AMMs of Ethereum, but to figure out how to build trustless trading bots (which can have much more sophisticated strategies) that anyone can contribute to.

Way back in the day @ripplerm was running trading bots on the XRPL that you could contribute to and earn a daily yield from. It wasn't trustless, you were entirely dependent on him to manage your funds and pay rewards honestly, but those were good times.

Link to comment
Share on other sites

7 hours ago, brianwalden said:

I've been farming the past few months and I agree. I look for pools that meet my very specific risk and reward conditions - I think the return on most of them doesn't compensate you enough for the risk.

Orderbooks are a much better system, that's why Wall Street uses them. The only problem is that trading order books requires skill. AMMs have been such a success because they've gotten people who can't trade off the sidelines and using their funds to contribute liquidity to the ecosystem.

Perhaps a compromise if the XRPL has a smart contract side chain is AMMs that translate their liquidity curve into bids that they place on the XRPL DEX. That way you get the maximum efficiency and utility of order books but still give schlubs like me who can't trade a way to participate.

Oh man. Looking at it that way, AMMs evolved specifically for the conditions in distributed smart contacts. The code has to be simple, because it's expensive to run code on the ledger. I think the future for the XRPL isn't to copy the simple formula-based AMMs of Ethereum, but to figure out how to build trustless trading bots (which can have much more sophisticated strategies) that anyone can contribute to.

Way back in the day @ripplerm was running trading bots on the XRPL that you could contribute to and earn a daily yield from. It wasn't trustless, you were entirely dependent on him to manage your funds and pay rewards honestly, but those were good times.

This is one of the best comments I've read on here in a while.

Adding to your thoughts, consider how Pathfinding can route liquidity through even more hops than an AMM's single pair.

Folks truly under appreciate the power of Pathfinding IMHO.

Oh and @ripplerm is the man, wish he'd pop back up. I also participated in his market making experiment.

Edited by KarmaCoverage
Link to comment
Share on other sites

4 hours ago, KarmaCoverage said:

This is one of the best comments I've read on here in a while.

Adding to your thoughts, consider how Pathfinding can route liquidity through even more hops than an AMM's single pair.

Folks truly under appreciate the power of Pathfinding IMHO.

Oh and @ripplerm is the man, wish he'd pop back up. I also participated in his market making experiment.

Personally, having to make multiple trades to get from one coin to another has been one of my biggest peeves - I didn't realize how good it was in the old days. Even modern XRPL wallets don't use pathfinding. It's a shame how the ledger has been abandoned. The ecosystem wasn't big enough to thrive on its own when Ripple pulled out, and it's just been a ghost town for years.

It looks like the winds are starting to change, but I'll believe it when I see it.

Link to comment
Share on other sites

10 hours ago, brianwalden said:

Personally, having to make multiple trades to get from one coin to another has been one of my biggest peeves - I didn't realize how good it was in the old days. Even modern XRPL wallets don't use pathfinding. It's a shame how the ledger has been abandoned. The ecosystem wasn't big enough to thrive on its own when Ripple pulled out, and it's just been a ghost town for years.

 

We had loads of announcements over the years about synthetic orderbooks and autobridging... yet I still haven't seen any app that actually uses them! It's crazy – perhaps the most advanced feature set of any DLT or DEX. 

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share



×
×
  • 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.