Introducing Gamma and Arrakis

HOPR DAO v0.5
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I think there may be some confusion. From my reading, the Arrakis proposal was not about managing the existing liquidity, but adding more single-sided HOPR liquidity to the position. I personally don’t think that’s the right answer because the $7M in full range liquidity currently is more than enough to handle the current level of volumes (Uniswap Info)

There’s around 5k - 50K of volumes on average, and a 100K DAI swap for HOPR is only incurring 1.74% price impact. The average trade size is around 10K or less, so I don’t think additional liquidity is needed.

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I think managing existing liquidity is the right answer here, and we would be happy to do that with Arrakis. But adding more single-sided HOPR seems excessive. It has the potential to mitigate upward price action and release more HOPR into circulating supply.

We’ve managed single-sided ranges before, but it was mainly for projects looking to source additional ETH or DAI. It was not for projects that currently had sufficient liquidity, so I do believe more single-sided HOPR is inappropriate in this scenario.

2 Likes
41

Arrakis 60%
Gamma 40%

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I don’t believe that putting all the eggs in a single basket is the best choice and both services seems to offer serious solutions. Something around 50 / 50, if possible, would be my choice.

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50/50

45

Thanks for the answers.

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Arrakis 50%
Gamma 50%

Trial time to be set by DAO voting. 1-3-6 months

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thanks, Arrakis proposal is very interesting and well detailed but I am wondering if any other proposals will be suggested ?

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I am only interested in the benefits the community enjoys, what will be specific

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Quick question.

If both providers are to provide liquidity for HOPR/ETH pair would they in anyway interfere with each others results?

1 Like
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Interesting

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Hi there (esp. to Gamma & Arrakis)

Thanks for your proposal. I think they are, in terms of why we need a a professional liquidity service provider, well formulated. I have some questions relating to the following:

  1. I can read about the fees. I think that most understand the basic concept. However, I would love to see whether the liquiditiy service provider could be incentivized according to the role he plays for guaranteeing price stability. And if no action is needed, no costs should result for HOPR. Is this something realistic to think of?
  2. I read that ETH pair is most important and focus should be given to it. Can you spend a few words on the pair with DAI? I experienced it to be a very convenient trading pair and would hope to see it growing in importance.
  3. HOPR is listed in Coinbase. How does a centralized exchange guarantee liquidity? Can they have issues regarding it or not?
2 Likes
52

We can guarantee a certain price impact based on trade size amount as that is deterministic based on the ranges that we use. In terms of price stability, we would not be able to gauge that reliably. However, if the DAO were to come to us and say, we want no more than 2% price impact on a 100K purchase, we could most certainly get that done with the current amount of liquidity. In terms of costs, 15% of the swap fees and rebalancing fees is really a minor portion. It’s important to note that Gamma does not charge anything on the liquidity itself, but only takes 15% of swap fee revenue.

So there are pros and cons to using ETH or DAI, which I can illustrate below:

ETH Pros:

  • More correlated with HOPR, so a tighter range can be used with less impermanent loss

  • ETH is the most paired asset on Uniswap, so pairing with ETH would allow for very efficient trade routing

ETH Cons:

  • It’s a volatile asset pair, so the price of HOPR would likely be dragged up or down by ETH volatility

DAI Pros:

  • Price stability - Pairing with DAI is essentially pairing to USD, so there’s less correlation with the volatility of ETH

DAI Cons:

  • Less correlation with HOPR, means a wider range should be used to mitigate the effects of IL

  • DAI is not paired with as many assets as ETH is, so there would be marginally less efficient routing

If I’m not mistaken, GSR is the centralized exchange market maker. Typically these arrangements are loan and option models where a market maker like GSR is loaned some HOPR tokens and use those to market make on a variety of exchanges to provide depth of liquidity. I don’t think any centralized exchange can guarantee liquidity, but the market makers are incentivized to have it there.

3 Likes
53

I think it is a good idea to have both compete in AMA. Furthermore, I think the percentage of liquidity provided here should be reviewed on a case-by-case basis. I think it would be a good idea to consider the effect of the service and the growth of HOPR to eventually move to one side or the other after a trial period.

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50/50

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Might be an interesting experiment. I don’t have any experience with them yet, so I can’t say yet in what proportions liquidity can be divided.

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put xToken on the list too!

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Gamma has been very active in responding to the community which was very positive. Most if not all fud was addressed. In the beginning I was very pro Arrakis. I do now have some concerns from Arrakis’ proposal. They will be running a v2 which no one has really used yet. Even with a couple audits without any real live data on their v2 it’s hard to support Arrakis fully.

3 Likes
59

It’s difficult for me to trust Gamma aftes the failure of Visor and Arrakis doesn’t convince me either. 1 year fees for the liquidity seems too much to me.

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amazing

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security and infrastructure must come first