Idea:

Honestly don’t understand why everything even needs to be in pairs in the first place.

Just use a virtual asset (not a real asset, can’t deposit or withdraw) in place of whatever else. That way you still get pricing internally to the system and don’t need an oracle. Then make everything single asset pools, paired with this non-existent asset. Have this virtual asset arb on it’s own internal to the system. Once you remove the withdrawable/deposit able real asset, IL disappears entirely – because you are never depositing or withdrawing in a pair, the pair only exists in the background.

No need to ‘cover’ because it never exists.

If you wanna make money from some pointless new token, just have it as a DAO/revenue token. Problem solved.

This whole problem is only introduced because platforms want to make money from creation of a token – just make your token do something else, so we don’t get stuck with your dumb problems.

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3 thoughts on “Idea:”

  1. > Then make everything single asset pools, paired with this non-existent asset.

    how do you determine prices for assets in these pools? You can use external price oracles but that kind of defeats the purpose of a DEX. Even if you use external oracles you’re still exposed to IL from all listed tokens.

    > IL disappears entirely – because you are never depositing or withdrawing in a pair, the pair only exists in the background.

    As far as I understand the system you’re describing all assets are paired against each other and you’re exposed to IL of all assets.

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  2. As someone else pointed out, your model is essentially pairing all the assets together. This is being done already ( Bancor and maybe Clipper (i think).) It still exposes you to IL though the entire protocol and all depositors share the IL. This is actually bad because the more volatile asset depositors benefit while the blue chip and stable depositors would have worse IL than if they had paired their assets on a traditional DEX.

    Celsius just withdrew their ETH from Bancor and got 45% less than deposited because of this exact mechanism.

    Had they paired the ETH with USDC during the bull market, they’d have more ETH now after withdrawing the liquidity.

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  3. /u/Monkey_1505, I have found an error in your post:

    > “on ~~it’s~~ [**its**] own”

    You, Monkey_1505, ought to have posted “on ~~it’s~~ [**its**] own” instead. ‘It’s’ means ‘it is’ or ‘it has’, but ‘its’ is possessive.

    ^(This is an automated bot. I do not intend to shame your mistakes. If you think the errors which I found are incorrect, please contact me through DMs!)

    Reply

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