Strategic Overview
This page gives a short strategic overview of the overall pricing strategy and how it will evolve, being profitable for all parties, the protocol ($SYMM holders), the hedgers (which will be either market makers or service providers), and the users ("traders").
Strategic roadmap for fee and margin
Short-term: offering Centralized exchanges' liquidity at a premium justified by the secured on-chain environment
The current on-chain environment has uncompetitive Perps offerings, with extremely high fees and low available liquidity for traders. This means that as a very first step, liquidity can be bridged from Centralised exchanges and brought on-chain, with a fat margin for hedgers and SYMMIO, and at the same time, improved conditions for traders.
The main hedger, Rasa Capital, achieves 250% to 300% annualized returns on its margin deposit, with minimal (operational) risk since all its positions are hedged.
Overall trade cost execution is 0.1%, and borrow or funding fees in the order of 20% are significantly lower than main on-chain offerings, yet a significant margin relative to the riskless and limited capital deployed.
Long-term: offering liquidity at conditions comparable to centralized exchanges in a secured on-chain environment
SYMMIO relies on AMFQ rather than order book technology. With SYMMIO, market makers do not need to lock their liquidity inside order books to meet the demand for all possible products. They can use their liquidity much more efficiently than on Cexes.
Market makers are thus expected to be able to provide liquidity at highly competitive prices.
The combination of liquidity sourced at highly competitive prices and of additional costs justified by the secured on-chain environment and by the ability to consistently source the best trading conditions may overall result in user costs similar to those at centralized exchanges.
Typical fee structure
From a trader's perspective, the typical fee structure is expected to comprise the following:
10-12 bps for opening and closing trade, to be shared between SYMMIO, the hedger, and the white labeling.
possible additional interest rate (borrow, funding, or rollover costs depending on the context), possibly in the 10% range
Such fees would be highly competitive for traders by on-chain standards yet allow for profitable operations.
Onboarding strategy
Besides the attractive business profitability for newcomers, the first to onboard and join the Deus ecosystem will benefit from considerable first-comer advantages.
Onboarding strategy for Dexes
The short-term objective is that a leading liquidity hub on each chain white labels SYMMIO Perps, and Dexes have considerable interest in joining:
Perps will generate fees for their token holders, a crucial element especially in the Curve- or Solidly-type of Dex, which need to maximize revenues for Solid stakers.
SYMMIO may only offer white labeling services to one or a few Dexes on each chain.
First-comers Dexes will benefit from advantageous fee-sharing agreements.
And Perps is just the first leg of SYMM IO services; better get a foot in the door and join our body of work.
Onboarding strategy for hedgers/market makers
The SYMMIO and DEUS team, in the interest of decentralization and the long-term success of the protocol, does not aim to capture the current abnormal returns of being a hedger, which gives plenty of room for onboarding incentives.
The overall strategy can be decomposed into two steps:
Onboarding on inefficiencies to create efficiencies: the short-term objective is to attract hedgers and market makers, let them benefit from abnormal returns from providing liquidity to the inefficient on-chain Perps market, and contribute to the longer-term efficiency of SYMMIO Perps.
Creating a secure on-chain environment with competitive pricing by traditional finance standards: the SYMMIO trading tech relies on AMFQs, which market makers to deploy their liquidity much more efficiently than with Dexes, where it needs to be pre-committed to order books.
SYMMIO in the Defi lego: the role of service providers
SYMMIO tech allows hedgers to be hedged against risk, which enables them to provide value-added services to their users.
We expect this unique ability to stimulate innovative service providers to build on top of SYMMIO, being hedgers with dedicated front-ends for their offerings and contributing to creating additional product offerings for the ecosystem.
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