Objective: Decentralize liquidity provision and make it economically sustainable
1. Rebalance liquidity pools (Mar)
Fixed reward rates for each pair. This has created a situation with drastic disparities in the size of liquidity pools. Currently, the BTC pool has ≈$20M, the DAI pool has ≈$6M, and the LTC pool has ≈400k.
The fixed total reward for pairs. APY will be rebalanced according to changes happening in the liquidity pools.
This is a temporary solution that will be replaced when we release Privacy v.2 and finish pDEX improvements.
2. Implement a minimum trading fee (April)
Currently, there is a 0% trading fee for all pairs in the pDEX. Economically, it does not incentivize liquidity providers to lock funds in pools, so the pDEX fully depends on additional network incentives like the Provide APY.
To solve this dependency, we’d like to implement a minimum trading fee that rewards anyone that uses the Add feature to trustlessly provide liquidity. This way, we can end the current trusted setup created by Provide.
Uniswap and other Ethereum-based DEXes use a standard fee of 0.3%. We believe that privacy is a unique feature offered by the Incognito pDEX, so the fee for anonymous trades should cost ≈ 0.25% for direct trade and 0.5% for cross-pair trade.
Do you agree? Should the fee be different? Let us know below this post.
3. Rebuild the pDEX (May)
Major changes are coming to the pDEX once Privacy v.2 is released:
- Removing temporary address (used during the trade process)
- Removing the “deposit” step while providing liquidity via Add
- Redesigning the UI for providing liquidity via Add
These changes will make trading in the pDEX faster and easier to use.
Once these upgrades have been implemented, we will begin migrating liquidity from trusted Provide to trustless ADD.