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51 sats \ 1 reply \ @Coinsreporter 14 Jul \ parent \ on: Predyx fees adjustment - feedback requested. oracle
This sounds great!
I'd create markets with 0.5% fee on each.
I'm already excited to put in markets on so many topics.
I certainly need to understand some logic behind liquidity for independant markets. What if a creator doesn't provide liquidity but the market gets very popular with many traders afloat. Wouldn't that serve as liquidity?
Unfortunately with LMSR (AMM - Automated Market Maker) you must seed a market with some Liquidity. That's the rule of LMSR - blame Robin Hansen for it, he is the inventor of LMSR (https://x.com/robinhanson)
Once Predyx starts getting sufficient traders and volume, we'll switch to CDA (Continuous Double Auction) similar to Binance/Coinbase where markets will be made by limit buy and sell bids from the market makers.
Initially our approach will be hybrid - where you initially create a market with LMSR. If your market gets enough volume and traders, the market will auto switch to CDA. After switching CDA, you may withdraw your LMSR liquidity.
In a creator's economy, while you have the freedom to set your own fees and decide on initial liquidity - someone else can create a similar market with lower fees and higher liquidity and sway all your traders to his/her market. Thus your fees and liquidity has to stay competitive.
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