The Duck Liquidity Pool — AMA from 21.09.2020
On Monday the 21st of September, the DuckDAO community had an AMA with its founders Ken, Lukas, and Travis. Joining them on the panel was a special guest — Sam from Samsoft, the Market Maker for the Duck Liquidity Pool!
The Duck Liquidity Pool — A Summary
The Duck Liquidity Pool is the name of the DuckDAO DEFI market maker. Funded by an initial sale of pre-mined tokens, the market maker will offer its services to projects and exchanges. Projects that are incubated by DuckDAO will be the first to benefit from this service, but it will become more widely accessible to external projects as time goes on.
Website: https://duckdao.io
Medium: https://medium.com/@duckdao
Telegram: https://t.me/joinchat/It2yDE3QPPTw9JLLMHLXKA
Twitter: https://twitter.com/dao_duck
Participants:
Ken | DuckDAO 🐥 — DuckDAO Founder
Lukas | DuckDAO🐥- DuckDAO Founder
Travis Derek — DuckDAO Founder
SamSoft — Duck Liquidity Pool Market Maker
Limmy — DuckDAO Community Manager and community representative
Please note that the following summary has been edited for clarity.
Limmy
Hello everyone, welcome to a very special edition of the DuckDAO AMA! This one is quite special as we have quite a large group with us today.
Joining us is Ken, Lukas and Travis from the DuckDAO team! We also have another special guest — the Market Maker that we have onboarded, SamSoft!
Lukas | DuckDAO🐥
Hello everyone ❤️.
Travis Derek
Hey, excited to be here.
SamSoft
Hello nice to be here.
Limmy
Should we start with a short intro (For Sam)?
SamSoft
My Name is Sam , I have worked for a MM Company for a few years and I’m very happy to work with DuckDAO now.
Limmy
Let’s dive right in.
This question has already been answered but there have been dozens of people asking so we should probably make this 100% clear.
Will DDIM tokens locked in uniswap contracts count towards the telegram group holding requirements (10,000 for DL, 2,500 for GC, 200 for BC)?
Travis Derek
No you would need to buy additional DDIM. The DDIM in your wallet is to get access to dealflow and your exclusive community. But there are other possibilities, DDIM is only one of them.
Limmy
Can you please Eli5 (explain like I’m five) the basic function of a market maker?
SamSoft
Matching Buyers and Sellers — provide liquidity. A market maker fills the order books on both sides, sell and buy. A market maker makes profit by the spread between sell-side and buy-side. When there is no market maker the markets become illiquide, meaning you can not sell or buy any tokens if there are not enough organic sellers and buyers.
Ken | DuckDAO 🐥
I think you can find a lot on google about it.
Limmy
Thanks — an essential part of this space for sure.
Why didn’t the team opt to use DDIM instead of creating a new token DLP?
Ken | DuckDAO 🐥
Several reasons: first of all, Duck Liquidity Pool is an additional service of DuckDAO, only for this reason it makes already sense to keep it separate.
To mix DDIM now with the Market Making makes no sense, it has to be independent. For the MM service the funding is needed in the beginning. DDIM is too widely distributed already, no farming would be possible.
But DDIM will profit too as it is included in the farming ecosystem.
Limmy
This should dispel all of the questions people had on this topic :).
Participation in yield farming/liquidity provision for DLP is optional for members correct? If I just wish to hold my DDIM to get access to the various incubation projects, I can just continue to hold my DDIM and will not have to buy DLP?
Lukas | DuckDAO🐥
Yes, that is totally fine. We were just looking to improve the community ecosystem and added an additional use case, business model so members can benefit from it.
Limmy
There are many members who don’t have any experience with yield farming, and there are many that do who don’t understand it completely.
Are there plans to provide some guidance documents to highlight the risks involved, and what happens to my staked tokens when DLP price drops or skyrockets? E.g. if I were to stake 1,000 DDIM, and 10,000 DLP to the DDIM/DLP pool, and the DLP price drops to 0.33x or moons to 3x, what happens to my DDIM/DLP totals?
Are there any tools like the Bitmex liquidation calculator available for this?
Travis Derek
Yes of course, as any yield farming you provide LPs from a defined pool. Lets take DDIM/DLP pool as an example here.
Ken | DuckDAO 🐥
If the price of DDIM skyrockets you will get more DLP tokens and less DDIM Tokens when you choose to unstake and exit the LP. This can also happen vice versa. Still you could sell the more DDIM tokens you got due to skyrocketing and buy back DLP tokens after this.
Lukas | DuckDAO🐥
There is also the risk of impermanent loss which is well explained here: https://finematics.com/impermanent-loss-explained/
The profits you can make with Yield Farming and the profits DLP LP Token stakers get from the MM service should be higher than the above mentioned risks in long-term.
Limmy
Ok thanks guys. I know that many are keen to try out the yield farming but it’s essential that we all know the risks.
Is this related to the The Foundry exchange partners: Kucoin, Bibox, Serum, and ACDX, and what impact do you expect this service to have on your relationship with these, specifically?
Ken | DuckDAO 🐥
I’ll answer this — No, this has nothing to do with the Foundry or these exchanges. But for sure we will offer the Market Maker Service also to the Foundry projects.
SamSoft
We can cover all exchanges (CEX & DEX), including those mentioned.
Limmy
Is this model the staking for $DDIM that was referred to in the DDIM WP? Do you have any other staking plans with Ferrum?
Lukas | DuckDAO🐥
No. We will also have staking on Ferrum, what will be an additional Use Case for DDIM. How this exactly will look like is under ongoing discussions.
In Addition once the DLP ecosystem is launched you have the ability to use your DDIM and e.g. get LPs from the pool DDIM/DLP and stake them for yield farming purposes.
Limmy
So there will be a huge amount of use for the DDIM to come — great!
Now we will move on to some questions related to the upcoming sale, and how the funds will be used. According to the current business plan how much money is/was needed to set up DLP?
SamSoft
For the market making liquidity providing it is as follows: as more funds are available, more projects can be served at the same time. When you think of MM on Bitfinex as an example, both sides of each trading pair need to be funded with 100k. So 2 pairs already means $400k, so you can now calculate for yourself what makes sense. Smaller exchanges need less funding for sure.
Lukas | DuckDAO🐥
Also the development of the Ecosystem will use some liquidity, as blockchain developers need to be paid.
Ken | DuckDAO 🐥
Correct. Just wanted to say this.
Limmy
Cool — that makes sense. The next question is closely related:
The WP mentions that you are planning to raise at least $800,000 from the presale — what will be the business model/plan for the 50% unlocked operational tokens (5,000,000)?
Ken | DuckDAO 🐥
These are not unlocked tokens, but vested over 12 months. It’s 4m tokens only, not 5m. [These] Can be new exchange listings of DLP, onboarding strategic partners etc. As we have proven already with DDIM we make always sure that it will not just enter the market and get dumped.
The 5m tokens are in the reserve and under the control of the DDIM Allstars
Limmy
It’s very encouraging to see how well thought out this is — without this kind of planning, we only need to look at the competition to see what happens ;)
Ken | DuckDAO 🐥
Yep
Limmy
How much money from the DDIM sale and pool sales will go into the DLP model?
Lukas | DuckDAO🐥
None.
Limmy
Nice concise answer haha
Lukas | DuckDAO🐥
It’s completely separate
Limmy
How do DDIM holders benefit from holding DLP and will there be vesting for Presale token holders?
Lukas | DuckDAO🐥
No vesting. In our opinion vestings make no sense. We want free markets. Like this we have a bottom price. DDIM holders will benefit because the demand for DDIM will increase because of the bonus multipliers.
Limmy
I’m sure many would agree — Free market is best market! Will the sale be fairly distributed over the different membership tier levels or can we expect higher tiers to have the option to invest more?
Ken | DuckDAO 🐥
Will be announced soon. We always want to be fair. Not an easy task to be honest
Limmy
Does this mean that fight club members will also get access?
Lukas | DuckDAO🐥
We try to get many people in this, but we won’t be able to get everybody on board. Wide distribution through the whole community is the way to go.
Limmy
I’m sure that many can appreciate the difficulty of balancing the distribution of tokens for such a sale — we see heated discussion on this topic after every sale.
The WP states that 10million DLP tokens will be sold to Strategic partners. How do the team intend to select its strategic partners as investors?
Lukas | DuckDAO🐥
DuckDAO network contributors. People that we know for years and can help us with different things. They will also have an individual cap.
Limmy
Ok now, we have Markus’ favourite question! Can you provide a timeframe for when the presale will be?
Ken | DuckDAO 🐥
Within 24 hours. Announcement today, opening most likely tomorrow. To be confirmed!
Limmy
Hear that folks — load up on coffee! Ok now we move onto the operational / functional questions of this new part of the DuckDAO ecosystem.
What kind of profits are you expecting from the market making services for projects? Are the sample values on the WP (E.g. $10,000, $100,000, $500,000) based on some real models or market making data?
SamSoft
This depends very much on the projects and the exchange. With strong projects with high volume, we earn more than with projects without much organic volume. The market maker always earns the spread between buyers and sellers — the more orders we match the more we earn.
These calculations are based on our experience as a market maker.
Limmy
So based on real world data, nice.
Who will run the MM and who will make sure that the strategies used are “ethically” correct?
Ken | DuckDAO 🐥
Sam comes from the regulated area so he is used to the highest standards — we will constantly monitor this. The figures come from past projects.
Limmy
50% profits are distributed to DLP farmers, not DLP token holders. Does this mean that the value of DLP itself comes from the fact that you need (or can use) DLP to farm DLP (and become a DLP farmer)?
Travis Derek
To get 50% profits of the MM service you need to have the DLP LP Tokens staked in farming. And you also get new DLP tokens. Is that clear?
Limmy
Yep that makes sense — you need to have the tokens staked in order to make use of the utility. Otherwise, you’re just speculating.
Travis Derek
Exactly.
Limmy
Has Bondly already purchased DLP or signed up for use of the MM?
Lukas | DuckDAO🐥
Bondly is a Foundry project, we even don’t know yet what exchange bondly will go in.
Limmy
Hopefully all of them :)
Ken | DuckDAO 🐥
We will ask them for sure.
Limmy
Will this market maker be used for previously/current incubation projects like Fyooz?
Lukas | DuckDAO🐥
No, we will always announce when DuckDAO MM is active. Maybe we can onboard older projects.
Limmy
That transparency and communication will be very important for investor trust as well.
Ok next question: Are there any plans for an airdrop to DDIM holders?
Ken | DuckDAO 🐥
No, but the DDIM holders have first access to be part of this. I don’t think airdrop is useful in this case.
Limmy
Fair enough — I think some will be a little heartbroken though.
As we know, liquidity pools suffer from impermanent loss.
The yields and multipliers offer value for providing liquidity, but is there a way to protect against, or offer some sort of bonus compensation for, the potential for impermanent loss incurred by large price swings?
Travis Derek
Yes as we know impermanent loss, which is well explained here https://finematics.com/impermanent-loss-explained, is a topic [relevant] when providing liquidity to Uniswap Pools. Yield farming means you will earn a variable % of DLP tokens providing liquidity to various pools like DDIM/DLP , but in addition you will earn 50% of the MM profits as DLP LP staker.
Limmy
Ok the next few questions are quite long so bear with me guys.
CEXs, just like DEXs, often suffer from liquidity deficits that limit the success of a smaller project through the inability to easily execute larger orders, slippage, added volatility, and — unlike DEXs — the psychological influence of a relatively large buy/sell wall on other market participants. Many CEXs will therefore even pay market makers to provide liquidity.
Do you expect — or have there already been — benefits or partnerships arising from this tiered market making service, such as quicker listings and additional exchanges?
Ken | DuckDAO 🐥
There is a huge network coming including the Market Maker who joined us. I think Sam can confirm.
Getting paid for liquidity is also an option that needs to be checked in the future, but not our main focus right now.
SamSoft
Sure I can confirm.
Limmy
Is there any chance that some of these services could incorporate Ferrum/Unifyre to reduce the friction of high transaction costs on Ethereum and as a consequence, to allow higher marginal returns to flow back to all parties involved? Is this a future plan if not feasible at launch, or would it be impractical in scope?
Ken | DuckDAO 🐥
There is no plan yet to do this, but you never know what the future brings?
Limmy
Change is always exciting!
So we have one final question for today before we open it up:
Is it also the case that, if an exchange were to provide compensation for market-making rather than the project, those profits would also be shared back into the flow as outlined in the blackpaper, #3 Fixed Fee Model?
SamSoft
Sure if this is the case, yes.
Limmy
Nice and concise again. We have now gone through all of the community questions that have been submitted so we’re going to open up the chat so you guys can get in some more questions.
🐥
How will You Attract Non-Crypto users? Good Product & Good marketing should be the top factor for any Project. What have you done in this field?
Ken | DuckDAO 🐥
I think attracting non crypto doesn’t make any sense in this crypto project. Marketing we will do together with the whole DuckDAO community, as it will have a stake in it.
🐥
What are the plans to Maximize the Token Exposure around the world?
Lukas | DuckDAO🐥
We will market it like an incubation project. So we will maximize social media exposure and good marketing. 👍
🐥
Yield Farming is Trending nowadays How does it Different From other platforms? & How will You try to attract Non Crypto users?
Ken | DuckDAO 🐥
The yield farming is trending, but it needs a real use case. [That] is given here. Again, I don’ t know if it makes sense to target non-crypto-users as the Market Making is for crypto exchanges.
🐥
Can You talk about the Liquidity Providers? Who can that be?& How will they be benefited
Travis Derek
Everyone can be a Liquidity Provider, this is how yield farming works.
🐥
How will You guys improve the Liquidity of the Native token? What Does DuckDao have to offer in this Defi World?
Lukas | DuckDAO🐥
First Defi Community driven MarketMaker. We are a long time in this space now and disrupted a lot. DuckDAO is a real movement and I think we have the experience to do that.
I saw you are only in the AMA group.
Please visit duckdao.io and also check our twitter❤️
🐥
Partners play a big role in any Project’s Success, Can You talk about your main Partners, What role they play in Your ecosystem?
Ken | DuckDAO 🐥
Last one! That’s true. But you know DuckDAO is very well connected in the crypto space. Our main Partner here is the Market Maker himself, and all the projects we will serve. Several projects are lined up already. I can’t say more about it before it is signed.
Thank you everyone for joining the AMA!
Limmy
On behalf of the community, thank you again for taking the time and addressing the concerns and questions that people have had. We all look forward to seeing where this takes us.
Ken | DuckDAO 🐥
Thanks everyone! Speak in the Tier Groups
Lukas | DuckDAO🐥
Thank you guys, super excited for the future.
SamSoft
Thank you very much guys ! We looking forward and I am very honored to work with you 🙏
Ken | DuckDAO 🐥
I hope you understand that we can not open the chat, as there are so many questions coming in each time. If you have further questions feel free to reach out! Thanks again!
