In the Dutch auction model you get a compensation rate related to your share of the total liquidity on that pair.
With fixed costs it’s still the same, but easier to understand.
While the Dutch auction model was not good to determine the compensation LPs demand for doing their job, the fixed cost model is: just track the liquidity over time and calculate the rate!
I think that much is true. In difference to the current model I expect liquidity to hover around the amount that meets the expectation of LPs for average compensation rate for fixed cost compensation models.
Nu will have an easier time to steer liquidity in this case!
Nu will know how expensive (the compensation rate in percent) liquidity providing at a particular exchange is!
It is lacking the bidding process, everyone gets the same price whether you want or not. One could set a lower threshold in the fixed price model, but it is still different as the pool wouldn’t take your stake into consideration. It is a shame that creon isn’t updating his software any longer, so change is a given as the code is complex indeed.
And that is why I’m supporting it, it is not that great for the LPs though.
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With fixed cost model everyone gets a share of the total payout (per minute) that is equal to the share of the total liquidity provided (in that minute).
There’s bidding. If I want a bigger share, I need to put in more money, which reduces the compensation rate per NBT, which might cause other LPs to drop off, because their minimum compensation rate is undercut.
As fixed cost reduced rollover funds, it should be very clear that fixed cost tends to pay out more than fixed reward given the same size Nu grant. I don’t think it comes down to good or bad, I think it comes down to fair or not, and in my opinion fixed cost is more fair. Should someone doing their best to balance and maintain a good peg really be paid the same as someone who doesn’t care and just plops their funds in the bot? I think we should pay more to those doing the heavy lifting, which fixed cost achieves.
the exchanges with “smaller walls” will give the biggest payments to the participants. thus a user would want to always search for the exchange that will give him the max payment. the result would be that in any time, exchanges would be balanced by users trying to fill the small walls. This “trying” is a lot of work by the users
Puzzle solved. Just transferred the remaining backpay for the 28-Sep. This day the server was running and the liquidity was on the exchange, except the liquidity was not submitted to the Nu client due to a corrupt blockchain which had to be reloaded and therefore automatic payment failed.
