Incentivised trading Vs Farming [Solution]

Exchange
#1

So the recent announcement of liquidity mining / farming is flawed in my opinion.

Requires active trading. It would be better if we call it incentivised trading.

Farmers / Traders and Holders are different type of people. There goal is different. Clubbing them all together and asking them to actively trade is not correct and won’t be helpful.

I my opinion we have two issues.

1- liquidity for #NEX token itself
2- Trading volume of the exchange.

I know security compliance and its limitation

I might might give a solution that’s solves everything. But might require slight changes in business model.

Problem 1

SOLUTION

NEX/ETH bridge by Nash Exhange

Someone creates a pool for NEX/ETH on uniswap.

LP tokens from the above pool is staked at NEX and Nash exchange provides yield in NEX.

Problem solved!

Problem 2

SOLUTION

Liquidity pool is created on Nash Exchange itself for various trading pair

Yield is provided by Nash exchange in the form of pool tokens or NEX (whatever is feasible)

Trading volume automatically increases when someone goes in or out of the pool.

Incentive for stakers

Provide yield boost for above two solution if someone has STAKED 1000 #NEX for 2 years.

To make sure incentives for staking NEX for 2 years is still there and it is aligned with core business model.

Farmers are one of the most tech savvy bunch in crypto and they move in herds.

Starting incentivised trading and calling it yield farming will shut doors for them once and for all.

We have one chance to do it right and keep everyone’s interest.

2 Likes
#2

Good news, it’s not called yield farming.
It’s called ‘Liquidity mining (NEX farming)’.
That leaves it to the ‘farming’ part which is a word used for very different things and can be roughly translated to sth like ‘collecting’.
Someone being picky about the name should be more accurate himself in my opinion.

#3

Disagree. Only an issue if you’re looking at short-term price. A more important indicator is users and price will grow steadily along the number of users, so I don’t see a liquidity problem. Getting NEX on Nash would be awesome for different reasons.

Some of us know you’ve encountered success with YFI and Uniswap. It doesn’t make it a universal solution, especially since it’s not the direction Nash has taken. Nash does not use AMM but orderbooks, which have obvious advantages over AMM (and probably certains drawbacks). Why are you suggesting Nash becomes a lesser version of Uniswap?

As yield farming is only possible thanks to unsustainable high-inflation coins, which NEX is - thank god - no part of, your suggestion would be costly in the short term and simply not viable in the long term. At least that’s my understanding of it.

My suggestion is that you give trading on Nash a try: you have the means to make a real difference now :slight_smile: (I’ve acquired a Gunbot license: it looks so interesting to dive into, can’t wait to get started. You should buy one!)

#4

Liquidity mining is a community-based, data-driven approach to market making, in which a token issuer or exchange can reward a pool of miners to provide liquidity for a specified token.

Here you are not providing liquidity. You are just trading

#5

I am not a trader!

Call it what it is!

It is incentivized trading and nothing more

I might be biased you are right. But the above two solutions can solve both problems! how to implement this without legal hassle or checking inflation is another issue

#6

And you weren’t a “yield farmer” before you became one… Just saying :slight_smile:

I’m not a trader, but part of me wanted to try it for a long time, so I’m taking this opportunity. Are you saying you have no interest whatsoever in understanding what trading is about? I would say your crypto education is not really complete with out it! :slightly_smiling_face:

Unfeasible is the word you’re looking for :wink:

#7

heheh! you are after me!

If this brings volume and liquidity I am all for it.

But just tell me if its anything other than incentivised trading?

1 Like
#8

I know what bothers you: farming makes it look like it’s organic and sustainable, whereas Nash’s campaign is just plain’old giving money away as an incentive to trade. So sure, you can call it incentivized trading, but I can farming incentized staking, since I find it just as unsustainable.

#9

Well to not make it a personal thing here:
1.)
The program is just one approach to bring volume to the exchange. (This time it rewards people that personally bring volume to the exchange). There are others like the referral program and there will be others more suited for holders (as far as I remember they already said that). All these different approches should complement each other. (Remember the Fly wheel?) And in the end a NEX stalker should benefit even if he/she doesnt take part in any of these programs.

2.) I agree that the name is not perfect. In my opinion it is overcomplicating things by using too many buzzwords.
I personally don’t care that much about the programs name.

Regards, J.

Edit*: stupid Auto correct phone

1 Like
#10

I call farming incentivized staking

#11

You are confusing what farming actually is with the UX around it.

When you “stake” a LP share from a AMM and is rewarded with tokens you are dedicating the trade activity return to the staking contract. By staking for “yield farming”, one is taking the risk of loss on market making around a fixed ask-bid spread (the AMM curve) in exchange to token rewards, which is traditionally given proportionally of how much funds you put at risk.

The project you staked for? It is earning the trading fees. Usually there is a balance between market making losses (which is all agglutinated in the famous impermanent loss) and trading fees, when you stake your LP tokens you must earn above the fee reward to compensate for the activity. Meaning you need to be rewarded with a quantity of tokens that have a price such that you can sell to offset such loss.

So … yield farming is incentivised trading when it is on exchanges such as {Something}Swap, Curve, Swerve and etc. It sometimes varies a bit for lending protocols.

Now the UX? Sure I can do a app where you put equal amounts of tokens A-B on market A/B (liquidity pooling just like Uniswap) and that it trades around a fixed spread curve (just like a AMM) and tells you how many NEX you are earning.

3 Likes
#12

Yeah I think the UX is where it is different. It should be as easy as can be to provide liquidity, but at the same time you don’t want to lose on the trade. So we will probably need a tutorial to learn how to use bots, and a cool interface with it!

2 Likes
#13

In essence, these are about the same things. But there is one big difference. In the case of the same well-known and widespread liquidity farming, for example, on a uniswap, everyone is in the same conditions, regardless of the skills of the participants (only the capital is different). Any person has pressed a couple of buttons and now he gets his reward in the general pool (in proportion to the contribution). Nothing else is required. In the Nash program, the complexity of participation is several times higher. In the sense that each participant (and his probable profits) depends on himself, on his skills, on the algorithm that he either stole or created himself. This is all great for the savyy members, but puts the average crowd member at a huge disadvantage. I’m not saying that this is good or bad, I just mean that there is a completely different entry threshold for participation. And therefore, it will most likely weed out a huge part of potential users.

3 Likes
#14

I think you are jumping gun a bit too early @Lepych, all we did so far was to describe how the program works - same way as people sharing their solidity before launching the mining or how Flamingo described how their program works with diagrams. The program starts on October 1st, I don’t know why this is even a conversation when the program has not started yet - we are sharing details with our community and just it.

As I said we will do a dead simple UI for the standard user, and people in the comunity will certainly build others as is a great opportunity to profit from the affiliate program (I think @fabibi and @Oldsport are aware of this).

Regarding this part of your comment:

You couldn’t be more wrong! I was looking here and >50% of transactions on Uniswap are front-run right now, that slippage that you increased to not “fail the trade”? That is bots front-running your order. The fees to “harvest” and swap are proibitive but prices keep going down? Guess what, you are being locked while a bot dumps. You can even arb intra pools, you do know that arb get’s funds from LPs rigth?

If anything Nash system is immensely more fair as trades happen on L2 and are private, the fact that orders are fee-less and arbitrage is fast.

5 Likes
#15

We are talking about different things (in uniswap part). And this is why rahil created current topic. (Incentivised trading vs farming)
You are talking about trading part on uniswap. And i know all this stuff about high gas frontrun bots and so on.
I was talking about liquidity mining (farming) part on uniswap for example or every other amm. When all users are equal and have equal APY. So any user just locking their liquidity, amm managing it and giving away some incentives for it.
In nash’s situation it cannot be the case obviously.
You cannot just lock your liquidity and wait for someone to manage it. You should manage it by yourself (or by algo)
And thats why i told that in uniswap liquidity mining case for example everyone is in the same conditions regardless of the skills, and in nash incentives program “crowd” couldnt compete with some savyy traders in achieving same APY.

#16

Hi @Lepych, I understand what both are saying, but I am not talking about different things. You are both looking under a higher abstraction than what is actually happening underneath of a farming campaign.

What you said “have equal APY” is what I said cannot be done, the APY depends on how fast you are rewarded and much you can sell the farmed token.

The usual dynamic is:

1 - Have A
2 - Buy B
3 - Put A and B on market (“pool”) A/B to provide liquidity at bid-ask
4 - Be rewarded C to give fees from A/B liquidity provision to project C
5 - Sell C to have APY.

Rate of reward of C and price of when you sell C define your APY. All those steps (1, 2, 3, 4, 5) can be done done with several levels of sophistication. On {Uni/Sushi}Swap or not.

Regarding:

You cannot just lock your liquidity and wait for someone to manage it. You should manage it by yourself (or by algo)

Isn’t locking your funds to provide liquidity on an AMM exactly that? Manage your ask-bid by a algo? x * y = k

1 Like
#17

Hello Fabio, really honored to speak with one of the bosses of my favorite project.
Answering this question…
It is. And thats why everyone in uniswap’s case in same conditions. 1 algo manages all liquidity.
In NASH’s incentives program everyone will use their own algos… thats why crowd would have much lower apy than some guys with skin in mm and trading games.

#18

I will say I was of the opinion of the original poster. Myself, being a complete newbie, thought it was going to be yield farming which I was excited to try out for the first time, since it required no knowledge from me. Learning it was incentivized trading was definitely disappointing for me, but I am still willing to give it a try. It just seems less sustainable from my perspective because I will only be trading for as long as the competition remains open, but with yield farming I could just leave it locked farming and I don’t have to worry about it. But realistically I will probably just give my first try to flamingo and let that be where I do this. I would just hate to take away money from Nash since it’s where the majority of my money is invested in.

2 Likes
#19

Yeah I would agree with @Lepych on that, to me it looks more like a trading competition since the outcome will depend on how good your trading strategy is.

A MM bot, designed by the team, and where all participants have the same odds, but are differentiated by how much asset they put in, is more of what I had in mind too.

#20

@Monkey with all due respect the OP doesn’t know what he is talking about, lot’s of issues here of what an AMM actually is and how value is acrued in farming. He is comparing the UX around something with how something works.

Both on Nash and Uniswap-based farming you need to be part of a trade (on Uniswap you are on every trade), and “just providing liquidity vs trading” makes absolute no sense, trading is providing liquidity.

To not diverge more time into this thread I will just summarize that as I said earlier I will do my best to provide something very close in UX, all I did so far was describe how we will track and reward liquidity mining - and is almost exactly how every farming program works under the hood.

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