Friend, I understand where your confusion comes from. Let me explain.
UniSwap does not exist in a vacuum. It is part of an ecosystem.
To understand how good it is, let me give you a specific example.
You’re a person in the United States and you want to buy some MAID from a DEX. You are ready to pay a 10% premium for not having KYC and you really have no choice where else to buy.
You buy MAID and the price in UniSwap goes up by 10% compared to ETH. At the same time, a trader on the centralized exchange Bittrex sees that the price has risen by 10% and he is making an arbitration. He sells MAID in UniSwap to get that 10% and buys in Bittrex more MAID. The difference is a profit for him.
At the same time, liquidity providers in UniSwap also benefit from fees.
You have a WIN for the person from the USA, a WIN for the trader and a WIN for the liquidity providers. I hope this helps
Yes I understand how it works and it is fundamentaly wrong and inefficient.
I just read the docs linked above and it just confirms what I know, that it is broken to the core.
There is a reason why orderbooks är superior and used everywhere because they work in the best efficient ways.
If you think that then I’am worried that your abillity to understand financial logical problems are not enough to draw conclusions if a financial system is good or bad.
Bob wants to buy $10 000 MAID at current market price. Bob does not want to pay more then 1% above the current market price.
Because they are two pools that needs to be in balance to not disturb the price, if one person in a trade adds $ in the ETH pool and reduces the pool MAID by equal amount (just for easy example).
To serve BoB’s $10 000 trade with no more then 1% above current market price the following has to happen.
Alice have 100 000 Eth in one pool.
Drake have 100 000 worth of MAID in one pool.
Bob adds $10 000 to the ETH pool, total =
%101 000
and gets $10 000 worth of MAID reducing the pool of MAID to $99 000.
But the deal failed because the inbalance of the pool raised the price about 2%.
MAID 99000/ETH 101000=0.98
1-0.98=0.02=2%
To support BoB’s trade with criterias given of a price increase of only 1%
the pools would have needed to be 20x BoB’s only trade.
To support BoB’s trade of $10 000 worth of MAID the pools would have needed to be.
ETH: $200 000 and MAID: $200 000.
Now to solve their broken and inefficient system they have somekind of formula to get around their fundamental broken system. That formula opens up for people stealing funds by gaming their system.
If you want your example to be real, you have to add the Bittrex trader, which will act as an arbitrage trader, because that’s exactly what happens in the real world, and that’s why UniSwap has a $ 1,750 million trade volume last month…
No, I don’t have to add anything because I just showed how inefficient and wrong the system is. Locking up huge amounts of ETH and MAID to support only much smaller trades.
That is fundamentaly logical wrong, nothing can help a system that is broken to the core
To support a trade with regular orderbooks:
Bob wants to buy $10 000 MAID.
Alice wants to Sell $10 000 MAID.
For a small fee Alice sells $10 000 MAID and gets $10 000 of ETH at any given price, minus small fees.
That trade only needed total of $20 000.
Same trade on Uniswap would have needed $200 000 locked in pools
Like I said, you look at things in a vacuum. In your example, you continue to miss the fact that for liquidity providers the risk is small but they earn as part of the system. This has value. This is part of an efficient market too, friend
Yes, fooling peoply by large overprices and make alot of money, have a high value for those who can force people buying something way above market price. But it is not fair or good.
People controlling millions of dollars have locked them in UniSwap. Time will tell if they were right. You may be right and they may be wrong. I personally look forward to locking MAID to UniSwap as well
You do alot of good Dimitar and I consider you a friend but sometimes you are not careful and think things through all the way, there was another token you also heavily supported that many raised serious issues about being a money grab or worse. I like all the good things you do, but I would wish you be more careful with recommendations.
Can you tell me where I told you to buy Hex? Nowhere, right? I suggested only to people to claim their free Hex.
Hex made x11500% up. If more people had listened to me to take the free Hex, we would now have the money to add Maid to some big exchanges…
And the discussion was about an efficient markets, friend. Not for good and evil. I personally consider all trade to be evil. You have a person behind one screen who wants to take the money of another person who is sitting behind another screen and who is trying to do the same…
I would prefer Kucoin. Seems pretty reliable. Listing may cost some, but if there is a will on the community’s part, we can put it together. There’s also a bit of similarity between us and them.
I remember everybody ridiculing the exchange when it started. Now it’s a place to go unless behemoths are viable to you.
I don’t want to be pessimist but all big exchanges (Kucoin, Binance, etc.) have very high fees for listing. Plus even if you could pay, if there is no traction around the project, exchanges won’t list a project with a low demand and potentially low trading volumes.
That’s why MAID got delisted from Poloniex (I remember posting about this and the team replied to me that they had good relationship with Poloniex, but at the end, it happened)
That wasn’t the reason… from what I saw, Poloniex got bought out and they preferred their own projects and dumped SAFE as a competitor… it was not a reasoned decision in the context of what coins had activity.
It was the reason, they don’t care about the project. They don’t mind if it’s a competitor or not, they just want to make money from it. No volume = no trading fees = no money. SAFE was not the only delisted project at this time, all low volume markets were.
Not really in term of global volume, not only poloniex volume. If you check the smallest volume assets in the last 24 hours on Polo, like LRC.
Based on CMC, the volume was 22M in the last 24 hours with 24 market pairs in at least 10 exchanges. So potentially the volume could be much more higher.
To compare, this is Maidsafe situation always based on CMC.
4 market pair, 2 exchanges.
I think the best strategy is to focus on small exchanges to start where it’s more easy to be listed and not spend time trying to be listed on Binance or Kucoin. When we have 10 small exchanges, then we can try targeting bigger exchanges.
