Result of a liquidity down spiral

current defi exchange volume driver (speculation)

  1. ~ Trading of WBTC/ETH pair

  2. ~ Liquidated CDP’s > purchase Dai from Kyber >sell off Eth collateral > liquidator goes to Wbtc/usd-c> withdraw BTC

onchain networks slow> increased slippage from spot prices >reduced trading>reduced fee for liquidity providers> reduced liquidity/increased withdrawals > further increased slippage > less trading >less fees… Death spiral

the dependence on the scalability of ETH is staggering

Nash i presume is using Centralised liquidity providers