- definition of liquidity
- liquidity vs ubiquity
- uniswap v2 legacy tech
Definition and measure of liquidity
Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price. The key in this definition of liquidity should be "without affecting its price". Liquidity should not be defined as "TVL in v2 pools" divided by treasury. Rather it should be referred to as "how big transaction do we want to be able to process while containing price slippage to less than 0.1 % ?"
Only legacy uniswap v2 technology is restricted to a linear relationship. v3 as you know has multiples higher efficiency, so we need to separate the liquidity concept from the mental trap of linear xyk pools.
Liquidity vs ubiquity
Another distinction is to separate liquidity (price slippage) from ubiquity (presence in every nook and cranny). While the first allows one to trade in and out without penalty, the second serves to hopefully see somebody hodl the token for sustained time (remove supply). Ubiquity should not be a goal in itself - slippage and supply removal is.
While I see bleed in the Treasury's own LP positions, I do not see why the same must be a problem for 3rd party liquidity providers. Anyone that wants to avoid the dilution of holding OHM in an LP, could simply chose to use gOHM instead of OHM. So why are we adding complexities to solve a problem that is already solved by using gOHM as the pairing token?
v2 legacy tech
This proposal builds upon uniswaps v2 xyk logic, right? Why would Olympus marry itself to legacy logic? I fear this is a technology trap where Olympus deploys logic that builds on somebody else's old, inefficient v2 technology instead of looking forward and really maximizing the potential of v3 or possibly in-house AMM technologies.
a) Incentivizing others to provide liquidity works to weaken the pooper2 paper. Walls are walls only when Olympus has monopoly on liquidity. The more distributed ownership of liquidity, the more porous the pooper2 walls will be.
b) Promoting 3rd parties to participate in 3rd party AMM's promotes and strengthens 3rd party AMM's ecosystems. It does not strengthen so much Olympus ecosystem.
c) In my vision, Olympus does a 100x better job at marketing and delivering its own products than currently. In my vision, people visit app.olympus.finance to access liquidity, to buy and sell OHM - they dont visit 3rd party AMM's. While visiting olympus.finance they discover they can price time through discounts and premiums through bonding. While visiting olympus.finance they discover Pro opportunities and snap up some partner tokens. By visiting olympus.finance they find a dynamic marketplace - worth revisiting on daily basis to look for opportunities. By creating this interest and traffic, partners are increasingly interested to join and build on Olympus ecosystem.