Comment on page
Liquidity Flow Case-study
The values provided are real-live values from our tests in march/april:
- 1.LP deposits USDC into an on-chain contract.
- 2.LP Software streams quotes (that it got from scanning the Binance order book) to Cloverfield.
- 3.A trader visits Cloverfield to requests a trade via an INTENT.
- 4.LP software reads the event of his request & lock his quote with an on-chain Tx
- 5.LP software opens a countertrade on Binance.
- 6.Then, LP software fills the locked quote from the user on-chain.
We are completely delta neutral. We generate profits by charging the user more on-chain than we pay off-chain.
- 1.The user wishes to go long on BTC for $10,000.
- 2.The current price on Binance is $27,500,
- 3.MarketMaker quoted the user on-chain at $27,775.
- 4.MarketMaker earns the difference in PnL.
- 5.The same applies to funding rates:
- 6.MarketMaker pays 10% yearly funding on Binance,
- 7.MarketMaker charges 20% onchain.
- 8.MarketMaker earns the difference in funding.
And this is only a simple structured product the first MarketMaker created on top of SYMMIO; Rasa could also hedge itself using spot markets and don't pay any funding or use futures contracts possibilities are endless; the opportunity to capture the on-chain derivatives market is now.
Despite earning on higher spreads and fees, MarketMaker offering via SYMMIO remains competitive with GMX, Gains, and DyDx.
Markets on-chain are still inefficient. This presents an opportunity for a liquidity/spread/funding arbitrage between on-chain and off-chain.