20 sats \ 0 replies \ @jeff 16 Nov 2022
@romain_rouphael Did you see my follow up question? from back in June?
Your article here tries to make the case that proof-of-reserves doesn't make sense for LNMarkets. I agree with this. However, Proof-of-Reserves is really just a technique for transparency. There are other ways to be transparent, that would make more sense for your platform, given my vague understanding of the way it works.
Some examples of transparency users should demand from your platform would be:
- a real-time view of aggregate open interest.
- a real-time view of gross notional exposure on your platform.
- disclosures about the other institutions you partner with, or use, in your offering. Eg. Deribit - is it just for their data? Or are you using Deribit to lay-off your own risk as well? If so, do you use anybody else?
And, if you really wanted to impress the community, you would publish:
- aggregated, real-time, net P&L for the sum of all your customers combined. That is, a single, daily, number. It should net-out, close to a very low negative (ie close to zero, but usually less than zero) after fees.
- a real-time view of the house's P&L daily. It should net-out, slightly positive, but not be egregiously positive. It should be proportional to your risk capital, and be a reasonable yield. Note that this yield shouldn't be funding your operations at your scale.
The reason this transparency is needed for you, where it wouldn't make sense for other platforms, is similar but opposite to the reason proof-of-reserves stops making sense for you. Other platforms aren't doing what you're doing. You're innovating.
It's logical that you need innovative forms of transparency.
I want to call out, that I try to give constructive feedback to every startup in this space, because I want the space to succeed. Note my comment history on SN; I engage with most founders intentionally. I'm sincerely trying to be helpful.
Keep up the great work! Your doing really cool stuff!
Note that I might change all the above suggestions, if you answer my linked question, in a way that provides new information.
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0 sats \ 1 reply \ @romain_rouphael OP 18 Nov 2022
Hey Jeff, thanks a lot for sharing this.
This is very valuable feedback, much appreciated.
We're always trying to find more innovative ways to be more transparent.
And the recent events can only confirm that direction.
Do you think just publishing a number (open position, PL, etc) is the right way to do it?
Could there be more trustless ways?
We're thinking about this too, and we plan to come with concrete stuff soon.
Best,
Romain
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0 sats \ 0 replies \ @romain_rouphael OP 18 Nov 2022
Oh and sorry, indeed I had not seen your June's post
So for futures & options, we hedge our clients' positions on Bitmex & Deribit.
(We have never had any exposure to FTX)
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0 sats \ 1 reply \ @SHORT_TSLA 16 Nov 2022
All that to say they're just adding automatic withdrawals. I was hopeful that they had a big announcement.
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0 sats \ 0 replies \ @romain_rouphael OP 18 Nov 2022
Hey, ok guilty of pre-announcement of an announcement, but we're cooking something.. Might take a while though
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0 sats \ 1 reply \ @faithandcredit 16 Nov 2022
I love LN markets
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0 sats \ 0 replies \ @romain_rouphael OP 18 Nov 2022
Thank you!
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