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DeXter-on-Radix / website

Community built order book dex on Radix.
https://dexteronradix.com/
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DeXter Trade Bot #539

Open dcts opened 1 month ago

dcts commented 1 month ago

Problem

Spread on DeXter can be very large.

Solution

@fliebenberg is working on a liquidity provision bot:

I have written a liquidity bot that does automated liquidity provision. It is quite simple and works best when it has a lot of liquidity relative to the order sizes it is placing. I could make the bot code publicly available (and probably still will), but I am thinking of rather creating some kind of a pooled instrument that people can use to provide liquidity for the bot. This will mean Dexter can offer liquidity provision opportunity that is similar to what you get on an AMM. The user can then add/withdraw liquidity whenever they want and it will help the bot be much more efficient in proving liquidity on Dexter. I will need to flesh out the idea further still and then find time to build the components required. But thought I'd mention it already to hear other views.

Added this issue to keep track of progress, as @yuliaSharabi suggested.

fliebenberg commented 4 weeks ago

Just an update on this issue: The liquidity bot has been working almost non-stop for the last 6 weeks. It seems pretty stable now in terms of bugs and errors and I generally have not had to intervene for several days as long as the internet connection is stable (I am running it on my home laptop at the moment). The next step is to do a bit of analysis on the profitability of the bot. Even though it is running on very low level of funds (basically it runs on tokens I supplied) at the moment, it should already be profitable if you take the Dexter Liquidity rewards into consideration. It has earned about 9K DEXTR as rewards over the last 2 reward periods. With more funds the bot will be much more efficient as it currently often has to cancel orders to move its prices higher/lower with no opposite trade to fund the cancellation as it did not have enough tokens for the opposite trade. If we can establish that the bot at least breaks even or makes a profit, we can look to build some kind of pool that people can "invest" in to provide funds to the bot and benefit from the profits it makes. These investors will not only earn an income on their funds from the trading activity of the bot, but they will also help provide enhanced liquidity on Dexter exchange which should lead to more efficient prices available on Dexter and thus more trades.

fliebenberg commented 4 weeks ago

Just another note on the envisaged "managed pool" we will use for the liquidity bot. We could build this to be a more general "managed portfolio pool" that will allow anyone to open a portfolio that others can invest in. The "manager" of the pool will be responsible for trading the tokens in the pool and will be able to charge a fee for this. The "investors" will be able to invest in and withdraw from the pool and benefit from any increase in the value of the pool as a result of the manager's trading. This could be a unique feature offered first by Dextr.