Kujira BOW LP-efficacy: an analysis

My MARS/axlUSDC sell-order hit on @TeamKujira FIN, for the purpose of funding the MARS-axlUSDC LP on BOW.

But.

I said I was going to study the efficacy of the BOW LPs. Are they growing on trade volumes?

BTW, what defining-curve does this chart illustrate?

My study revealed the following.

I, as a liquidity provider, have seen 0 growth of the LPs.

Since day 1 that I've provided liquidity.

This is gravely concerning to me.

Not only are LPs not growing on trading volume, but, do you see the 3 red lines (OT)?

These denote three LPs that have simply vanished from BOW.

I've submitted a ticket, but this is the fourth ticket, for a total of 6 LPs, that I've submitted.

This is gravely concerning to me.

Not only this, but LPs comprise 20% of my Kujira-portfolio, 

and are the major drag on that portfolio, down, now 8%. 

This is atrocious performance for a component that's supposed to ACCUMULATE liquidity.

This is gravely concerning to me.

Given this direct observation that LP tokens DO NOT increase on order book-volume, the ONLY incentive for @TeamKujira BOW LPs are ... the incentives.*

Most of which have dried up.

*or if you're hedging A on a massive B deflation, but I'm not talking specific power-plays here.

Now, there's a reply to my concern on discord (thank you, Hans, from @TeamKujira).

But I do not see BOW LPs as a viable part of my Kujira-portfolio: they are far too buggy, 'disappearing' liquidity too often, requiring I SUBMIT TICKETS TO RECOVER FUNDS!??!?

THIS IS A REAL COST!

Furthermore, 'size of pool growth' benefits the liquidity provider, ... how?

I provide x tokens a month ago, I withdraw x tokens today, AMM-adjusted I see 0% APR.

For all BOW LPs.

Consequently, I'm withdrawing all liquidity from BOW.

I would

LOVE

to hear your success stories of investing in BOW LPs, with measurable proof of your successes.

I, however, have measures that show me that BOW LPs are not for me.

Graph-theory pop-quiz: remove risky FIN order books

Graph-theory pop-quiz.

This graph represents the FIN marketplace.

Isn't it glorious?

It was generated from a copy-pasta of the FIN marketplace `stamp`ed into $FIN_DIR/market.lsv

which then ./graphista created CSV to load into an Aura @neo4j instance.

That isn't the quiz, however. That's the HOWTO.

The quiz is this: ./vern, my main man, ./vern has a preference to recommend arb-paths that include ATOM/OSMO or SCRT or STARS, all of which, I have found, are dead-ends for my tokens.

Remove these token-sinks from the graph. 

CAVEAT: 

I won't mind of you remove the $SCRT and $STARS tokens altogether.

I will be quite put out of you remove either the $ATOM or $OSMO tokens. Remove NEITHER $ATOM NOR $OSMO.

Those have viable arb-paths (just not viable ones that are ATOM/OSMO or OSMO/ATOM-adjacent). 

DEFINITION of DONE:

Queries against the graph generate arb-paths for all-isomorphic-paths.csv that do not include ATOM/OSMO, OSMO/ATOM, nor SCRT nor STARS.

ATOM-OSMO.csv, OSMO-ATOM.csv, and all other CSV files in ch08/efficacy/data/ become obsolete (why?) 

Rust pop-quiz: all-paths vern

Rust pop-quiz:

improve ./vern:

• ./vern

So that ./vern takes a file of ALL arb paths (besides the markets), and two arguments: start-coin, A, and end-coin, B, and finds most efficacious paths, A -> B.

• (answer)

Trading policy

I'm noticing something about my long-play trades: some trades are getting stuck, for days.

This is not agile. This is my fault.

Good. I can fix this.

So: if a trade become stale, for than a day before it's executed, here's what I'll do going forward.

1. Cancel the trade.
2. Run ./vern from the last executed trade in the path, creating a new path.
3. generate that new path in ./gantt
4. execute the new trade.

BOOM!

Trades stuck is frozen liquidity. I don't have time to be frozen (🎵 Let it go! Let it go!🎵): I'm BUIDL'n.

Let's rock.

Rust pop-answer: vern-prime

Rust pop-answer to generalizing ./vern to any paths, A -> B:

./vern, my main man, ./vern got a face-lift.

n.b.:

./vern n A data/market.lsv data/A.csv

For some token, A

is idempotent to

./efficacy n data/market.lsv data/A.csv

Rust pop-quiz: ./vern-prime

./vern, my main man, ./vern gives me the best trading-paths A->A, because I'm all about that arb.

./vern is great at doing that.

./vern

But the markets are not static.

That's why in A-B-C-D-E->A

I need to know the best path, say: D->A

Write ./vern'

Hint

I have the isomorphic paths of the major players, $KUJI, $ATOM, $OSMO, $axlUSDC, and $USK mapped out already.

This means those paths work for any crypto, A, because all crypto traded has a stable or $KUJI or $ATOM pair.

BUIDL ./vern' in that light.

• (answer)

2022-12-02 Trade: 140 OSMO -> ATOM

I'm going to do a little experiment. @TeamKujira has silently minimized the $OSMO-play. None of their LP pairs has $OSMO.

So I'm going to trade away my $OSMO for $ATOM. One approach is:

• OSMO,ATOM

But I think ./vern has a better approach:

• OSMO,axlUSDC,KUJI,USK,axlUSDC,ATOM

I'm going to do a little experiment. @TeamKujira has silently minimized the $OSMO-play. None of their LP pairs has $OSMO.

1. Which way will be faster?
2. Which way gets more more $ATOM?
3. Which play will I go for?

To answer the first two question, the answer to the third question must, of course, be 'BOTH!'

• 2022-12-02 placed: 70 $OSMO -> 6.8783 $ATOM, BUY at 10.177 fulfilled

• 2022-12-02 placed, 70 $OSMO -> 70.28 $axlUSDC, SELL at 1.004 fulfilled

Market conditions HAVE changed, indicating a change in flow: we'll swap to $KUJI FIRST, THEN swap to $USK.

Updated gantt-chart attached (above)

Let's do the trade.

• 2022-12-03 placed: 70.27 $axlUSDC -> _ $KUJI, BUY at 0.573 retracted
• OSMO,axlUSDC,USK,KUJI,ATOM
• 2022-12-06 placed: 70.27 axlUSDC -> _ USK, SELL at 0.9569 fulfilled

And we have a winner!

AND I WAS SO RIGHT I WAS WRONG! YUS

So, my OSMO -> ATOM-play, I posited thatthe ATOM / OSMO order book trade would be slower than a circuitous route.

I WAS SO WRONG BECAUSE THE OSMO -> ATOM TRADE HIT!

I love being wrong. I now move this trade to the 'completed trades'-section.

The circuitous route-branch

Moving on from the $KUJI-loss.

All is not doom and gloom!

The new OSMO -> ATOM path looks promising.

• I canceled the stuck 70.27 axlUSDC -> KUJI order

• ./vern, my main man, ./vern tells me to place this order:

• 2022-12-06 placed: 70.27 axlUSDC -> 67.2414 USK, SELL at 0.9569 fulfilled

Oft we go!

This new trade-path is forecast to do ~2% better than the straight OSMO -> ATOM trade closed earlier, so: YAY! 

And the axlUSDC -> USK limit order hit right away! WOOT!

... so I place the next order in the trade-path:

• 2022-12-06 placed: 67.24 USK -> _ KUJI, BUY at 0.61 retracted

No. That's not right. 4 large orders went above my BUY limit order bid, right away, so:

• retract order
• place new limit order, BUY at 0.618 (instead of 0.61).
• 2022-12-06 placed: 67.24 USK -> _ KUJI, BUY at 0.618 fulfilled

*WHEW* things change quickly!

And THAT new order hit right away! AHA! 

... so I place the final bid in this trade-path:

• 2022-12-06 placed: 108.8026 KUJI -> _ ATOM, SELL at 0.0662 retracted

... and THAT's how you do trading-paths, folks! 😎

Stuck on KUJI-> ATOM, but ./vern has a simple work-around with KUJI,USK,ATOM, so:

I retract the current bid 

...and place:

• 2022-12-07 placed: 108.8026 KUJI -> 63.1055 USK, SELL at 0.58 fulfilled

And that hits right away.

So I claim it and turn right around to place the closing bid:

• 2022-12-07 placed: 63.1055 USK -> _ ATOM, BUY at 9.005 fulfilled

Closing a long-play trade

You see this trade here? 

This trade completes the OSMO/ATOM-journey.

Let's measure results.

I started with 140 $OSMO ($124), 

70 I traded on ATOM/OSMO for 6.8783 $ATOM

The other 70 $OSMO took the long way to 7.01

13.89 $ATOM total ($132)

2022-12-07: 140 $OSMO ($124) -> 13.8861 $ATOM ($132) 6.45% ROI, 5 days. Trade closed.

2022-12-02 Trade: 100 $axlUSDC

Let's 'create' $axlUSDC.

./vern says:

• axlUSDC,USK,ATOM,OSMO,axlUSDC

but, of course, we wish to avoid ATOM / OSMO order book (?) so the path around that is:

• ATOM,KUJI,USK,ATOM,axlUSDC,OSMO

Our gantt-chart is:

Friendly reminder (to myself, mostly) that gantt-charts are only good up to the point where they are made. Changing market conditions may require (significant) course corrections. Caveat trader.

The first trade in this series is:

• 2022-12-02 placed: 100 $axlUSDC -> 96.49 $USK, SELL at 0.9649 fulfilled

I claimed the axlUSDC / USK order, so now, onto the next step.

First, I have to find out what the next step is, so I go ask ./vern, my main man, ./vern.

./vern has some very different ideas today, but there is still and optimal path that includes $USK.

• axlUSDC,OSMO,ATOM,USK,KUJI,axlUSDC
• 2022-12-03 placed: 96.49 USK -> 162.9899 KUJI, BUY at 0.592 fulfilled
• 2022-12-03 placed: 163 KUJI -> 101.06 axlUSDC, SELL at 0.62 fulfilled

Eheh. That got filled RIGHT QUICK! 

Result

2022-12-03: 100 axlUSDC -> 101.06 axlUSDC, 1.06 axlUSDC (1.06%) ROI, 1 day

2022-12-01 Trade: 100 USK

Next, ./vern suggests a $USK-trade.

• USK,axlUSDC,KUJI,ATOM,axlUSDC,USK

It's a straightforward path.

• 2022-12-01 (EM's 21st birthday): placed 100 $USK -> _ $axlUSDC, BUY at 0.9299 retracted

Let's revisit the 100 USK -> USK arb, 

... that never got off the ground. 🙄

./vern, my main man, ./vern recommends an entirely new trade-path:

• USK,ATOM,OSMO,axlUSDC,USK

So I start this trade-path:

• 2022-12-06 placed: 100 USK -> _ ATOM, BUY at 9.488 fulfilled

This is via the ATOM/OSMO order book (low volume), so I ask ./vern for an alternate path:

• USK,ATOM,(axlUSDC,USK,KUJI,axlUSDC),OSMO,axlUSDC,USK

So we're taking the scenic route. 🙄

The USK -> ATOM order hit. So I claim that 

... and run the market data through ./vern, my main man, ./vern.

./vern, again, has new ideas. Still via ATOM/OSMO, still as complicated a trade-path, but now, the nodes are different, again.

• USK,ATOM,(KUJI,USK,ATOM,axlUSDC),OSMO,axlUSDC,KUJI,USK

Okay. We adjust, then place the new order.

• 2022-12-06 placed: 10.5396 ATOM -> 162.8995 KUJI, BUY at 0.0647 fulfilled

The ATOM -> KUJI trade hit in the USK-arb. 

So we ask ./vern, my main man, ./vern to give us an updated trade-path, based on current markets.

The path is much simpler this morning.

Mr. ./gantt charts the course for us.

• USK,ATOM,(KUJI,axlUSDC,OSMO),ATOM,USK

And thus, we place the next trade in the path:

• 2022-12-07 placed: 162.8995 KUJI -> _ axlUSDC, SELL at 0.647 retracted 
• 2022-12-07 placed: 162.8995 KUJI -> 100.336 axlUSDC, SELL at 0.616 fulfilled
• axlUSDC,OSMO,ATOM,axlUSDC,USK
• 2022-12-07 placed: 100.336 axlUSDC -> 116.5343 OSMO, BUY at 0.861 fulfilled

And record the new order in our SPREADSHEETSZORXEN!?!?!?!??! 

Yus. Yus, we do.

We have the same $OSMO-story for the $USK-arb:

./vern, my main man, ./vern recommends the ATOM/OSMO order book.

The workaround ./vern recommends is to sell the $OSMO for $axlUSDC, 

• OSMO,axlUSDC,KUJI,USK,ATOM

which is what I shall do. 

• 2022-12-08 placed: 116.5343 OSMO -> _ axlUSDC, SELL at 0.923 fulfilled