Auto compound, MIN staking and Impermanent Loss limitation

Hello,

Having inspected other DEX functionalities, I believe the three features that needs to be implemented in order for Minswap to be the leading DEX on Cardano are:

  • Auto compounding

  • Staking MIN for MIN (or ADA as described in this proposal)

  • Elimination of Impermanent Loss by introducing the concept of trading on specific price ranges as done by Uniswap V3

Auto-compounding can be implemented as described below:

  • The user selects a specific period (e.g. daily at 12:00) where the auto-compound will be performed. This is done on a per farm bases.

  • When the auto-compound trigger for the specific user and pool is fired, a script is run that perform a harvest of MIN rewards, then performs a ZAP of those MIN rewards to get the relevant LP tokens which in turn submits back to the specific pool under the user account of course.

Hope that helps make Minswap a killer app and the dominant DEX on Cardano.

Thank you.

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This is an opportunity for a developer to “buidl”. If you are a Haskell dev and would like brainstorm about it, let me know.

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I am a developer but not a Haskell one unfortunately. Nevertheless, regarding auto-compounding, I believe implementation should be fairly easy since functionalities for harvesting, “Zapping” and submitting LP tokens is already there. So what essentially needs to be implemented, apart from the UI work that is, is a script to automate existing functionality in a single unit of work. The use of a triggering/scheduling library to periodically fire the script execution is also mandatory.

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These are excellent ideas, Kioub!

The Impermanent Loss Limitation is an especially interesting concept.

It’s very possible that the impermanent losses on the ADA-MIN pair are now so bad that many yield farmers are essentially paying double digit % premiums than current market prices for the few extra MIN that they have accumulated as part of the pool share, which is unacceptable.

The sad part is that it is also possible that some yield farmers are not even aware that this is happening.

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Educational content should be higher on the to-do list of the Minswap team. Personally, I didn’t mind the price going down because I’m now holding more $MIN than when I started yield farming, which was the goal from the start.

Also, stables should come to Cardano soon, because yield farming with two volatile tokens isn’t preferred.

Educational content like… Lessons on impermanent loss?

Edit:
I see you liked my post but didn’t reply. The reason I was asking is because I was wondering what unique content Minswap should produce that isn’t already available somewhere else. I would put something like this on a list of “nice to haves” not “need to haves” for a decentralized exchange. Honestly, it is not the fault of Minswap (or any other DEX) when people get “rekt” from impermanent loss and the like.

A cute “Using an AMM DEX 101” with cats might be fun, but people really should be bringing that knowledge with them here (or only play with small amounts of money).

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I think any additions or updates should be catered to the user base. If you want to make the DEX more approachable to novice users, then the user interface needs to make everything easy.

I would love to see how much I have invested in the DEX initially as well as my current liquidity. On top of that, seeing aggregate rewards when farming would also be helpful to see. The more transparent the gains and losses are the more comfortable people will be investing.

Impermanent Loss become less of a mystery when you can see it live in action and see clearly if your rewards are making up the difference. Most people using the DEX today can keep track of this info on your own, but more casual users (and future users that are not involved in crypto today) will likely have a better experience and be more likely to invest more if they had a clear view of what was happening on the DEX.

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