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An Introduction of How Pegged Assets and Synthetics AMM Pairs Can Solve Slippage and Impermanent Loss: Defibox As an Example (With Chinese Version)

2021 is a starting year for EOS Defi. As a mature DPOS chain, although EOS still has room for improvement in terms of decentralization, the high performance and low transaction fees are very suitable for Defi designed for the layman, not only for whales. Since the April 2021 algorithmic stable coin bubble of Defis burst, Defibox is now the EOS Defi with the largest TVL and trading volume. To compete with other chains with abundant ecosystem, Defibox still has to improve the slippage caused by inadequate liquidity. In my opinion, encouraging capitals to join AMM (Automated Market Maker) of pegged assets and synthetic assets can help to solve this problem as a simple solution.

Pegged assets have their original assets collateralized in smart contract, and the relative token is issued on EOS chain respectively. The major circulating pegged assets on EOS are issued by pNetwork, including PBTC, PETH, PLTC, PUNI, etc., and are accepted in both eastern and western Defi. Other pegged assets include USD stable coin issued by Ecurve and BTC, ETH issued by Defis. Synthetics are “index tokens“ issued by over collateralizing at synthetic Defi, without the support of original assets. Organix issue OUSD, OBTC, OETH, OLTC, OUNI on EOS chain by over collateralizing OGX and staker can earn dividends. Others include X-tokens of USDX and Y-tokens of DFG.

The problem of present AMM is when investor participate in the market making of two different assets like PBTC/USDT, when the market follows a single side trend, impermanent loss occurs, and traders will encounter the problem of high slippage and inefficient utilization of capital. Encouraging capital to participate in pegged asset – synthetics market making can solve this problem effectively. For example pooling PBTC/OBTC and USDT/OUSD (or pooling other stablecoins including EOSDT, VIGOR, USN, PDAI like how curve does), when someone exchanges a large amount of PBTC to USDT, firstly it is converted to OBTC, then through zero slippage trading of Organix to OUSD, finally to USDT, this may avoid the huge slippage caused by large order. Samely this applies to any other pegged asset – synthetics pairs, like PBTC/PETH, PLTC/EOS, etc. Of course, to achieve this there are 2 requirements: high liquidity of pegged asset – synthetics pairs, and a functional oracle for synthetics.

Therefore, I advise Defibox and Organix, and other parties to devote resources (providing liquidity or LP mining) to encourage pegged asset – synthetics pairs pooling, to solve the problem of low liquidity. This should be favourable for large capital trading on EOS chain, and benefits the whole ecosystem, and make it easier to compete with other chains. All the lego is there, it‘s time to assemble them.

by Zabalen

簡論掛鈎與合成資產做市交易對如何解決EOS鏈上滑點和無常損失問題:以Defibox為例

2021仍EOS鏈上Defi初出茅蘆之年,作為DPOS始祖鏈雖仍有空間改進以達去中心化,但其優良的性能與低手續費確實非常適合使用Defi的平民(而不只是富豪)。自從2021年4月Defis上的算法穩定幣泡沫爆破後,Defibox現成為EOS鏈上鎖倉和交易量最大的Defi。然而要趕上生態豐富的公鏈,仍然有待改進做市深度不足所致交易滑點問題。本人認為鼓勵資金參與各幣種掛鈎資產與合成資產的做市,能有助解決此問題。

掛鈎資產(Pegged assets),即有原資產在智能合約作抵押,於EOS鏈上發行的通證(token)。現在EOS最泛用的掛鈎資產為pNetwork所發行的一系列通證如PBTC, PETH, PLTC, PUNI等等,其於東方和西方的各Defi上通用,其餘掛鈎資產包括Ecurve的美元穩定幣和Defis的BTC和ETH等。合成資產(Synthetics),即透過合成Defi中以超額抵額發行的「指數幣」,沒有原資產支撐。EOS上的Organix為其一,發行OUSD, OBTC, OETH, OLTC, OUNI等,並以超額OGX作抵額資產並享有手續費分紅。其餘包括USDX的X資產和大瘋狗的Y資產。

現時AMM問題在於當投資者參與兩種不同資產的做市時(如PBTC/USDT),當發生單邊行情,將出現無常損失, 而且交易者交易大資金時有很高滑點、很低資金利用率。鼓勵資金做市掛鈎資產和其對應合成資產可以很好地解決此問題,例如分別做市PBTC/OBTC和USDT/OUSD(或以curve方式做市其他EOS鏈上穩定幣,包括EOSDT, VIGOR, USN, PDAI),當大量資金要PBTC轉換成USDT,首先其轉成OBTC,然後透過Organix的無滑點交易轉成OUSD,最後轉成USDT,這樣可以避免大額交易所做成的巨大滑點,從而節省手續費。同樣道理適用於任何有足夠深度支持的交易對,如PBTC/PETH、PLTC/EOS。當然,要實行此解決方案需要兩個條件:掛鈎資產/合成資產深度足夠,和合成資產的預言機餵價要良好運作。

因此,我建議Defibox和Organix和其他團體投放資源(提供深度或流動性挖礦)來鼓勵各掛鈎資產/合成資產做市,以解決深度問題,這樣應該更用大資金在EOS鏈上進行交易,讓整個生態受惠,以及更容易和其他高性能區塊鏈競爭。樂高已經齊全,是時候組合起來了。

綾裹石

*This Essay is submitted to participate “Play DeFi, Build Block” by Defibox foundation with account “romans1x2abc”. 本人以這篇文章參與Defibox基金會的「玩Defi拼未來」徵文比賽,eos帳戶為romans1x2abc。
link: https://defibox.io/activity/article

1 Like

I like it… hopefully more people read this. I hold ltc and would to pegg it over to eos defi, but as you’ve mentioned liquidity is low for these pegged assets.