i'm crosslinking this from the Dashtalk forum as not everyone in here visits that forum :
https://dashtalk.org/threads/incentivizing-liquidity-providers.5752/Incentivizing liquidity providers I have been thinking about liquidity providers again lately (i'm talking about running wallets with -liquidityprovider=
: Provide liquidity to Darksend by infrequently mixing coins on a continual basis (0-100, default: 0, 1=very frequent, high fees, 100=very infrequent, low fees) and how they can help with the mixing process a lot more if they got more rewarding to operate. I'm brainstorming here so bare with me ..
How about we setup an internal ''pool'' somewhere inside the darksend process that has a hardcap limit of lets say 25 liquidy providers as max and
reward those liquidity providers with some dash for x time period of mixing. Lets say for 12 hours mixing as liquidity provider they can receive x amount of dash.
Network has to determine they are indeed active liquidity providers and should also have a way of tracking
how long they have been actively mixing in order for them to receive rewards.
Edit :
we can also make the pool a lot bigger and see if we can attract more users to Dash, there is obvious
an interest in receiving steady rewards for either an investment (masternode style) or for time and energy (POW mining style).
The liquidity provider rewards could be the third reward option to attract new users to Dash
Or to make this even easier to implement, this could become a proposal to get it both funded and implemented?
i would like to get some feedback from the community and dev team first, to see if its technically achievable, diserable and how the community feels
about it.
great idea, i'd 4 sure vote for it. the faster the mix the better.
I've been thinking about incentivizing liquidity providers too, but I think I have a much simplier idea. Why not just make a proposal in the budget system to pay a few people back for the effort of running one of these nodes? The cost of running one of these nodes would be a server, fee's for the mixing and some amount of dash in addition to compensate them for the effort. Maybe a couple hundred dollars a month total for a few people? Granted there's no way to prove they're running the liquidity provider, other than the fact that mixing will be faster, so we'll need to find people we trust in the community.
Those words "trusted people".....they kept me up a few nights thinking about any project proposing to create a system that relies on this kind of trust.
There are now almost 3,000 MNs. All with untouched collateral funds.
Some thoughts on options:
1. Segregate 25% of MN collateral for mixing
2. Allow MNs to mix while remaining part of the MN count.
They are there to provide a service. Darksend is one of the key protocol services.
For example.
During the mixing process, the protocol randomly chooses a number of MNs to elect into the mixing process.
Now, add this.
Create a trivial nonce so that all remaining MNs compete for being liquidity mixing providers. The first 10 to solve a trivial problem are elected to do the mixing, for which the people wanting coins to be mixed pay these MNs a fee.
Possibly add a 'mixing = true' function into the config settings so anyone not wanting to compete for mixing fees can opt out of being a liquidity provider.
