New BSIP: Market Making Reward Pool

[abitmore]

Daniel "bytemaster" Larimer proposed a mechanism to subsidize market liquidity in Feb. 2016 (link at the end). Due to historical reasons, it didn't get implemented on BitShares. Lately it got implemented on Steem and got disabled after being active for 25 days (https://github.com/steemit/steem/commit/5cb8019b5804fa0f659d88cffe2ad4cafafd981d). While the mechanism did lead to amazing market liquidity, the measurement of contributions to liquidity and the rewarding settings were debatable. Nevertheless, the idea about reward pools was good.

As of writing, there is a market making contest for the BitShares DEX in planning (link at the end). If the result is positive, it's good to implement it into the protocol.

• Any user or worker can contribute funds to the reward pool. These funds can be denominated in any asset specified by the asset owner.
• The asset owner has the ability to enable this feature for any market their asset trades in and to specify the asset used to fund the reward pool.
• (details about contribution measurement and rewarding will be added here later)

Links:

• The ongoing market making contest https://bitsharestalk.org/index.php?topic=31515.0
• Old discussion "Subsidizing Market Liquidity" https://bitsharestalk.org/index.php/topic,21544.0.html

[froooze]

@abitmore The intention is good, but paying for market making should only be the first and last option, to increase the liquidity on our markets. In the long run we create an unsustainable welfare state, which is not the intention of market making.

The Integration of lending options should have the highest priority to increase liquidity:

• BSIP70
• MLP
• MPLP

Afterwards the automation of margin position maintenance and asset balancing to our lending options are needed.

[grctest]

Which assets would be in scope of being allocated market making rewards?

[abitmore]

"specified by the asset owner".