| id | Title | Status | Author | Description | Discussions to | Created |
|---|---|---|---|---|---|---|
| TIP-118 | Overtime liquidity&skew impact increases | Draft | Danijel (@danthales) | Overtime liquidity&skew impact increases | https://discord.gg/thales | 2022-12-21 |
This TIP proposes a notable increase in liquidity offered across Overtime's markets followed with an increase in the max skew impact variable
After the World Cup campaign we can say with high conviction that Overtime's AMM will be profitable as long as there is sufficient organic volume and the odds oracle is sharp. To help with the former, I am proposing that we reuse some of the profits from the WC campaign to effectively double all liquidity caps across all sports, trending to tripling those caps if the positive PnL of the AMM continues. The changes proposed in TIP-114 should allow us to ensure the odds are always sharp and to reduce the frontrunning attack vectors to a level where it is non material with regards to PnL.
With higher caps, the effect of the skew impact is reduced, which in result means the self-balancing introduced with discounts is less effective. I am thus proposing to also increase the max skew impact, but not double it, rather change the max skew impact from 10% to 15%. This will ensure traders still have benefits from this TIP as they will always get better terms when trading on Overtime compared to the current setup.
- Increase caps as follows:
All soccer leagues: 8k (was 5k for EPL and UEFA, 3k for others)
NFL: 8k (was 5k)
NBA: 6k (was 3k)
NCAAF: 5k (was 3k)
NCAAB: 5k (wasnt enabled so far)
NHL: 5k (was 2k)
UFC: 5k (was 3k)
The above applies for all moneyline markets. Spread and Total markets will be half of moneyline liquidity by default. Caps on a specific sport are determined as a function of demand for it, PnL so far and observed frontrunning or other risks. Protocol DAO will continue adapting these ad hoc as we observe changes in previously established patterns (e.g. if we are assured that TIP-114 has stopped NBA frontrunning, or at least reduced it to a non-material level, we will raise NBA caps).
- Increase max skew impact from 10% to 15%.
Copyright and related rights waived via CC0.