Hi fellow Sovryns!
2 days ago I opened a 2x long on live.sovryn.app trading to test the trading.
My position opened approximately $2000 higher than the oracle price. I reckon this is because most on the platform are long, and there is not much liquidity. Although we are at an early stage, obviously this needs to be solved to achieve functionality of the platform.
I posted this on the discord without feedback, so now I’m posting it here along with thoughts on possible solutions.
TL;DR: show us the gains for liquidity provision, make the gains great, tell us how to do it and emphasize that it is safe.
First is to make clear what the returns are for liquidity providing, and how one goes about it. Right now it isn’t clear to me; the information, if it exists, is not readily available. I actually looked into it because I wanted to to LP, if the gains were good, but it didn’t seem operable due to lack of info, so I figured I should wait.
So, make it clear that users are invited to provide liquidity, and make the gains + procedure easy to see and understand.
Talking about gains, I propose that the APY starts high.
This is the classic DeFi approach for good reason. It serves to attract liquidity fast, which is important because the platform needs that liquidity to get up and running. High APY for early liquidity incentivizes people to do LP sooner rather than later, which leverages the process. So high initial APY = faster acquisition of liquidity = faster development.
Secondly, I believe it is also justifiable to the liquidity providers, as the further the protocol is developed, the smaller the risk for providing liquidity to it. After all, although we have the Immunefi bounty, we don’t know if the critical error is just undiscovered yet, since the bounty is still just some 3 weeks old.
In summary: higher APY for early users = attracts liquidity faster + rewards risk of doing LP in an early phase. High APY in general = attracts liquidity providers
Third and final, I believe that we should promote that the platform is indeed safe, perhaps with a quick article about the results of the first 3 weeks of Immunefi bounty, which to my understanding didn’t find any major bugs. Thus we could make an article with ‘Sovryn is safe’ and ‘Great rewards for providing early liquidity’ all in one and push that.
Concluding it all:
Make it clear that liquidity is wanted + what the returns are + how-to.
Make the rewards attractive, potentially with a high starting apy that then falls as more liquidity enters
Make it clear that Sovryn is a safe place to put your assets to work through liquidity providing.
Stay Sovryn you lovely people!
- Alykz Alex / K