Stimulating Long-Tail markets liquidity

Hey @RealVovochka

Lattice Research, as part of their grant, will release a report in the next month. The MegaVault upgrade will include vault withdrawals, at which point we’ll start to transition grants funding out while deposits flow in, marking the end of our initiative.

Those numbers look off to me. Here’s what I see using the following query on Numia:

Total Volume: $100,748,455.75

Total Taker Fees: $26,938.18

In other words, ~$1.5M of capital deposited has facilitated upwards of $100M trading volume in about five months. Keep in mind that our capital deployment was very small at the beginning. Tracking volume over time, we see a positive increase that trends with our increase in capital deployed and number of markets supported:

I just about agree with your market maker numbers. The addresses mentioned have the following share of volume against vaults:

  • dydx14dlt: ~42%
  • dydx18p7: ~9%
  • dydx15u3: ~3%

However, it’s worth noting that these are some of the most active market participants on dYdX. In October, those same addresses had the following share of ALL dYdX volume:

  • dydx14dl: ~33%
  • dydx18p7: ~3%
  • dydx15u3: ~10%

Overall, Vaults facilitate trading volume by improving spreads and liquidity. It shouldn’t really matter who the counterpart is – they were able to trade thanks to the liquidity provided by vaults, ultimately making dYdX a better venue. Adverse selection will always exist in markets, but that’s where the MegaVault will need to adjust its strategy to protect against losses while still facilitating volume.

2 Likes