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101 sats \ 2 replies \ @BlokchainB 11h \ on: 📣 Community Feedback Requested: Predyx Fee Structure oracle
For this to be a lightning native product I still don’t understand why you have to go with full percentages 100 basis points? Why not try to use 10 or 20? What’s the point of using lightning when the fee structure is just like fiat?
Thanks - I think you're right about lightning native and must be way lower than fiat.
Another reason that prompted me to go with such fees structure was that I started to take User Created Markets into considerations. With thinly traded markets - as we have now, it would be impossible get back the liquidity you inject in the market at the time of market creation. In an LMSR market - you must by rule have to inject some liquidity to create a market. If the fees are not enough, the market creator will loose the liquidity that was provided at the time of market creation. Thus less incentive to create a market, until and unless you're willing to let go of the liquidity - in seeking the information from the market. In other words you pay with liquidity to seek some future information.
I hope I was able explain my motivation with regards to user created markets.
We can definitely start with 20 basis points - and for the purpose of being transparent, we can publish the liquidity injected, fees collected and final profit/loss for the market creator. This will probably explain about the market dynamics and why adequate fees are required in LMSR.
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I think by using lightning the better tech should win. Better tech should provide more value to both business owners and consumers. It shouldn’t be zero sum. If you can compete with fees (like Robinhood did with stock trading) you can attract more users to the platform.
Market making is a hard business and without a huge liquidity provider you can bankrupt yourself especially with the scammers gaming the system but slapping massive fees to stop bad behavior punishes honest actors.
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