pull down to refresh
87 sats \ 10 replies \ @mega_dreamer OP 20h \ parent \ on: 📣 Community Feedback Requested: Predyx Fee Structure oracle
Thanks for breaking my fear - I think its same like public speaking fear. (In my mind I always thought from my own limitations) I'm going give writing myself a try w/o use of AI. Lets see how feels.
The double-spend or parallel attack issues have been fixed.
But in this (the current spam events) case the spammer/attacker is draining us with network fees. We do not charge any fees on sell to LNAddress directly. However there is a network fees that we have to pay everytime the user sells to LNAddress directly. If he sells to internal Predyx/lnbits wallet then this is not a problem, as the internal wallet transfers don't go through the network but just database updates (its a feature of lnbits) - I hope I was able to explain the above issue clearly.
Thanks for sharing the link, will give it a read.
However there is a network fees that we have to pay everytime the user sells to LNAddress directly.
Oh, right, you should definitely charge users for network fees and not pay them out of your own pocket, else you're opening yourself up to fee siphoning attacks.
If that's the reason for the fees on selling, wouldn't charging them for network fees be the fix you're actually looking for? If you're still paying for network fees out of your own pocket, this doesn't actually fix fee siphoning.
reply
Thanks for "fee siphoning attack" link - I'm hearing it for the first time. Will implement the network fees for LNAddress payouts.
Also another motivation for adding the fees are to incentivize the market creators. We have plans to allow user created markets in few weeks. As you may already know every market created in LMSR must be subsidized with liquidity. The between 33% - 66% of this liquidity gets lost as the market comes to conclusion based on how thinly the market is traded. And if the market moves only in one direction, then almost all of the liquidity is lost.
Wanted to be prepared for the user created markets - by adding fees and fine tuning it to optimal level so that the user is incentivized to create markets.
Next we also wanted to get ready to allow 3rd party to provide liquidity with an incentive to earn fees. There will be no motivation to provide any liquidity without the potential to earn some fees.
reply
It seems like the optimal fee structure will have a fixed component to cover the fixed transactions costs and an exit fee that’s proportional to the wager to mitigate attacks.
reply
Yes - thanks for pointing it out.
Am I understanding you correct with below example:
The optimal fee structure will have two components ( fixed + variable) just like in the lightning routing node fees like 1 sats base fee + 100ppm transaction fees.
reply
Yes, and I think the variable rates probably shouldn't be fixed over time, but I haven't thought that all the way through.
reply
Yes - I agree, the variable rates should be dynamic based of the trade size and trade counts. Lets brainstorm more on this and reach and optimum level - where the fees don't seem too high and at the same time the marketplace/exchange is still profitable.
Thanks for "fee siphoning attack" link - I'm hearing it for the first time. Will implement the network fees for LNAddress payouts.
Also created a post about it: #1008424
As you may already know every market created in LMSR must be subsidized with liquidity. The between 33% - 66% of this liquidity gets lost as the market comes to conclusion based on how thinly the market is traded. And if the market moves only in one direction, then almost all of the liquidity is lost.
Yes, I remember talking about this with @kr when I was still working on delphi.market!
Wanted to be prepared for the user created markets - by adding fees and fine tuning it to optimal level so that the user is incentivized to create markets.Next we also wanted to get ready to allow 3rd party to provide liquidity with an incentive to earn fees. There will be no motivation to provide any liquidity without the potential to earn some fees.
Ok, makes sense
reply
Thanks for publishing fee siphoning attack article #1008424 very helpful for new lightning businesses.
Yes, I remember talking about this with @kr when I was still working on delphi.market!
Yes LMSR can be good and bad. I think to bootstrap any prediction markets - its a good idea to start with LMSR and eventually move to the traditional Continuous Double Auction (CDA) trading (Buyers submit bids, sellers submit asks. A trade occurs whenever a bid meets or exceeds an ask.).
The CDA model is more profitable for exchanges/marketplace as compared to LMSR as the traders make the markets as opposed to LMSR.
We'll start working on CDA as we gain significant user/trade volume. Its in our roadmap.
reply