AAVE is the first coin to be offered in such a way and one of my friends bought a 100€ worth of AAVE just to test the service.
Of this 100€ he received 53$ worth of AAVE and 60$ went for ETH blockchain fees (gas price at the time was 157.3 Gwei).
I realize this is not Nash fault but the overall impression was underwhelming. In CEX’s you pay a blockchain fee only when withdrawing assets outside of the exchange so this may look bad for Nash in the eyes of the mainstream users that Nash targets.
If a user would constantly buy/sell via L1 like it uses the L2 the blockchain fees would destroy all profits. Obviously the L1 is not suited for such high frequency trading but how else will Nash raise its trading volume?
It is not using the L2 blockchain fees. ERC-20 tokens are smart contracts and have their built in transfer function. If this function gets invoked it will calculate the costs based on the operations used.
Overall as you said, it is an “issue” from Ethereum itself. Nash cannot do anything about it.
Interesting you bring this one up. Nash has the same option for state channel supported assets. And there the fee is even a 0% fee. Only if you withdraw your assets to L1 you have to pay a fee (similiar to a CEX withdraw). Also funds on L2 are non custodial (you own them) what CEX can’t offer.
L1 purchases will enforce their power, if low fee blockchains are supported. Chains with nearly zero transaction costs wouldn’t cause your described troubles with low amount purchases.
Also, I personally don’t see the Fiat on/offramp on Layer 1 as frequent trading tool. It is a way to get into and out of crypto. I will only use it this way. Real trading will still happen on exchanges, which offer a way better trading experience.
Nash whitelable solution allows to offer this service to bigger audiences. This scaling solution is the way to gain an attractive revenue through the ramp.
Get users trading.
And offering a LINK/BTC and NEO/BTC pair *dreamin
Yes, but the L2 solution will not support 10 new coins that were announced for the 2021 roadmap. For this year the focus is on L1 MPC trading.
Me too, but how is Nash going to get a raise in volume if the focus is on L1 MPC trading?
We have concluded that L1 MPC is not a suitable trading tool. On the other hand, Nash announced that L2 trading is no longer in focus and new coins will not be coming to L2 so where is the volume coming from? What am I missing?
It isn’t L1 MPC trading. There are way too many buzzwords in those 3 words.^^ It is a FIAT on/offramp, whereby the funds go directly to a user wallet. Also these wallets don’t need to be protected by MPC. Third parties can integrate this solution.
For me it looks like nash plan is to grow their userbase with entering the NEO banking space. Users can handle their crypto and fiat at on spot. The new users will have access to all crypto services nash offers.
Nash Cash, Nash Exchange - currently available
Nash Savings - getting built/served through 3 parties (I think)
Volume will come from the FIAT ramp. The whitelable solution, which will be integrated into other projects like AAVE and AVEX. But the volume isn’t nash exchange volume. It is another way to gain revenue. A totally different product. As there is a 1% fee, nash collects revenue with it and also share the revenue.
As nash will grow their user base with the fiat ramp (they found market fit) I’m pretty sure they are still seeking for market fit for their other products (nash link, nash exchange).
I guess/hope they also plan to find a way to transform new users from nash cash into new users from nash exchange.
The way I see it is that the L1 strategy is an extension of Nash cash and it will mainly be used for on boarding and off boarding rather than trading.
But if state channels would not be developed for these new coins then the fiat ramps would come with a great catch in a sense that most of the coins supported by the L1 are not supported on the L2 exchange.
Exactly. This has been communicated since the new strategy was launched, all the details are in Fabian’s original post and the accompanying blog post.
Going forward, Nash will focus on providing the best gateway for retail users to invest in crypto, while expanding into digital banking offerings that seamlessly integrate DeFi services.
As mentioned by @Symiaq, ERC20s are smart contracts. AAVE, even just to transfer, takes a particularly great amount of gas. If your friend had bought ETH instead, he would have paid 10x less network fee.
To circumvent such unfortunate user experience, the mobile team was very reactive to add a warning if estimated network fees are higher than 20% of paid funds.
what about giving the user an option to get funds in L2 even if the coin is not tradable (as long as its one of the supported chains) I imagine someone who wants to DCA in a particular coin and realize the advantage of non custodial L2 and will withdraw once a year.
Good thinking, but I’m afraid 0% fiat onramps on L2 are only possible because of the exchange running on it. So Nash would not earn any money on those, meaning it cannot be a business priority.
1% fee on non-tradable coins should still apply. but it allows the user to buy now (when the price is right) and withdraw later (when fees are cheaper).
the only problem i see is that nash will have to have some idle assets in L2 and will pay the fees for getting on and off L2
Most likely regular ( uneducated) user will think that this is Nash charging them so much. And really in the end, this type of fees make this service unusable for majority of the people on the planet
People that I recommended to invest in Nash, they complained to me about the fee to buy NEX with ETH, where I explained that this crazy fee is from ETH not Nash. Still it didn’t change the fact that having 20$ to invest will not cover the transaction cost.
I am happy for me that I can afford to pay the fee, and really hope that little $$$ ( from my hometown) will have the opportunity to use Nash soon
This is likely a work in progress. But bear in mind that right now it’s only volume coming from Nash fiat ramp on mobile and it’s a very new feature, so volume may not be so high (I have no idea tbh). At some point, that L1 volume will also count third-party ramps on partner platforms. And it will also grow as new coins get added.
All in all, many ways to grow and we are still early, but we’ll definitely get there
One could argue that DeFi is in dire need of a not-terrible fiat ramp solution, no?
Personally, I think the L2 exchange market is pretty saturated. Also, with how big Uniswap’s warchest is (they have more $ than the Ethereum Foundation), I wouldn’t be surprised if it moved to become regulated if required by the authorities. Total speculation, but food for thought.
The whole idea of Nash rested on its unique matching engine. Nash even had the first-mover advantage with first non-custodial non-wrapped btc trading. The idea that Nash would essentially give up on its L2 and their state-channel tech to become some DeFi version of Coinbase is unsettling for me (as someone who was excited for this project ever since the CoZ days of Nash founders).
The L2 exchange and its matching engine aren’t given up on! They simply won’t be receiving as much attention (innovation) until the time is right. But its tech is still great and I’m sure when fiat ramps and core banking services are mastered (decent market share), the focus could shift back to the exchange, notably because all those services will feed it, making it more and more attractive for traders.
In other words, I would say the vision hasn’t changed, only the path to achieve it.
