Topic: [XMR] Monero Speculation - page 44. (Read 3313076 times)

I understand this thread is about speculating on the price of Monero, so I will try to explain why I think a strong price discovery mechanism is highly related. (I imagine the OP of this reddit post https://www.reddit.com/r/Monero/comments/kp0hhg/monero_price_discovery_atomic_swaps_exchange/ tried to describe the same problem but I am not sure he was understood)

#1 Relying on other sources for price determination is bad

- If the atomic swaps system (that was funded for development) relies on other exchanges for price determination, the price will not increase even if the volume is high. If 5% of the global volume occurs on Binance, 5% on HBTC, 5% on OKEx and 85% on the atomic swaps system, the price will still be an average of the 15% volume occurring on Binance, HBTC and OKEx (thus all the volume occurring on the atomic swaps system won't have any effect on the price)

- The system wouldn't be fully decentralized as it wouldn't work without the price feeds of centralized exchanges

- Almost all of the recent exploits in Defi occurred because of price oracles manipulations


#2 Building a price discovery mechanism is hard

- Maintaining an order book on a blockchain is not effective because every bids and asks must be published on the chain (on the contrary, it is very easy for a centralized exchange because they just use a database...). On non smart-contract chains like BTC and XMR, this is almost impossible to implement. Even if it was, it would be very expensive (every bid and ask would incur a fee) and slow (you would need to wait for the next block to have your bid / ask validated). Layer2 would solve these problems but Lightning is for payments (not contracts) and no sight of Layer2 on XMR as far as I know...

- If the atomic swaps systems somehow implements a price discovery mechanism, but a clunky one (like on Bisq), buyers and sellers will just end up setting a "price + X%" (based on the average price of other exchanges, thus coming back to problem #1)


#3 AMM on smart contract chains is the way to go at the moment

AMM (Automated Market Maker) is a simple idea that fixed the order book on chain for the moment. It is not perfect (liquidity providers might occur impermanent loss at the profit of arbitragers) but it's the best decentralized solution until layer2 contracts are implemented. Uniswap (and clones) managed to capture huge volumes thanks to this simple idea


#4 A better system will be invented

Right now, all Defi occurs on Ethereum because it's so much easier to develop on. AMM is a temporary fix that will probably be replaced by true order books when a good layer2 solution is implemented. But all volume might shift to yet another chain if Ethereum doesn't scale quickly enough. I just want to insist that building a decentralized exchange with a true price discovery mechanism is not easy: some projects might do it better than others and maybe on chains that don't even exist yet


#5 The case for renXMR

The RenVM is a network of nodes acting as an inter-blockchain bridge (like WBTC but permissionless and decentralized). A tokenized version of XMR on other chains (renXMR on Ethereum for example) would allow us to use the best DEXes out there, in a fully permissionless and unstoppable way. I am not trying to shill Ren here (or Monero on Ren channels) but I am long term hodler of both and I just think that these two should really have a baby... I don't understand why an atomic swaps solution was funded while we might have a better solution with a REN bridge. I believe the price of XMR remained abnormally low because of the trading happening on centralized exchanges (which is defying the purpose of Monero), but atomic swaps don't look like the best way to me (especially after seeing Komodo fail). Note that REN is not even fully decentralized yet (see roadmap) and it's not cheap, but it allows me to use my BTC on the best defi protocols (exchange on Uniswap, earning yield on Yearn, use BTC as collateral on Aave, change for DAI if I want stability, etc...). I would love to do the same with my XMR and use Bisq as a fiat ramp only.


Please don't treat this post as a newbie obsession, I read this forum for a long time (and especially this thread) but I just signed up recently. In a way, I feel lucky I wasn't there at the very beginning or I would have probably gone through KYC like many of you had to. Hopefully, this "virgin" status will save me the day even CBDC's are traded on permissionless/decentralized exchanges! Also XMR is still a bargain right now (especially in BTC) so I don't feel late at all

In less then 3 weeks time Monero will be 7 years old. Hopefully that will put some light on the project. In June there is planed Monero Konferenco 2022 in Berlin https://monerokon.com/cfp/  It was cancelled last year and postponed to this year. Right now I am wondering how big chance is that it happens. Covid is very alive right now in Europe, but 3 months can change a lot.  


EDIT: https://twitter.com/MoneroKon/status/1360312111105146881   I see it was already decided to be an online conference.

I think today ($235) the below major event is far from priced in yet. In <14 months tail emission kicks in, the last variable block reward is mined (currently ~1.09 XMR per two minute block and dropping). At that future date in just eight years time a whopping 18.4 million XMR are mined. A then constant tail emission of 0.6 XMR per block means ~0.85% inflation in the first year (157,680 XMR), and that percentage is declining each following year. The only way still being able to get a decent number of monero is increasing your bid price, there a very few new moneros coming into existence from miners.

I will check in again in a year's time. But in the meanwhile, grab some while they are still cheap.


https://www.getmonero.org/resources/moneropedia/tail-emission.html

Atomic swap is the mechanism, it can be used (setup a transaction) by anyone.

You question is for software that will use the mechanism to facilitate a dex.

Thank you, but I am not sure I understand. Do you mean a whole DEX will be built on purpose with its own price discovery mechanism? Would it use an order book or an AMM?

IIRC It should be what the market can bear,

IOW whatever you set your sell price for.

I was reading https://localmonero.co/knowledge/monero-atomic-swaps?language=en but I still don't understand how price discovery will work with atomic swaps. Can someone explain me? Will the system rely on the price of XMR/BTC on other exchanges?

You know, I have two mediumish margin positions... both long on XMR and BTC in USD.  Honestly I'm starting to feel really comfortable in this position for the long term because of the fact that the xmr/usd & btc/usd relationships are pretty directly inversely related yet bullish in the general trends. 

Feeling good, man

Monero doing so well on so many metrics. Everything is pointing towards greatness, except price. Are people not getting worried?

Four days in March Monero had less than 20k transactions a day. Today is the last chance for it, to end month with 5 such days. Overall for month March number should be around 700k. Usually at the end of the month numbers start decreasing. Hopefully this month will not be such.

Also a good Monero review of a guy that gets over 100k views on youtube. https://www.youtube.com/watch?v=O58STfvxZnY

SOOOOOOO  many bugs will be exploited in these closed source ledgers.  It will take time, but this will be good for Bitcoin, and Monero for sure.

All Central Bank Cryptocurrencies will have opaque ledger. They will for sure vastly advertise why that is way better then Bitcoins transparent ledger. Sadly it might take years for them to be implemented. Definitely for EU. China might be faster.

Normie coins are willing to integrate privacy features on themselves. Once privacy fashion hits the cryptosphere Monero will shine with it's own dark light

XMR is a currency that in my opinion is one of those that will always survive despite any event, the reason is simple, privacy and anonymity is something that many in the near future will seek, in addition the history of Monero is another index that is very likely to continue growing.

In most people when they go to observe the chart of any alt they see how the behavior of Bitcoin is, and Monero follows the same direction as Bitcoin, which is quite beneficial, especially for Monero hodlers.


Source: tradingview.com

I think that at any moment Monero will reach the 475USD that it reached in December 2017, it may come and go, apparently Monero is undervalued, it is a very good chance for those who are undecided to buy Monero.

still the leader.

Who remembers the traditional annual March pump?  2015, 2016 and 2017 was pump all the year anyway   Oh and looking at chart it was also 2018.

But the good news is that transactions seems to make another leg up after staying static in January and February. 16 days in a row with 20k+ transactions a day. Very soon this should be a standard.   

I feel like this is the 3rd time I’ve seen this announced since 2017.

now you guys can use your best privacy coin ^(monero) for traveling....enjoy your life


https://twitter.com/travalacom/status/1370572489185652737

Thats a good question.

It might take time to build up marketbooks? or maybe it wont?   lol


Who knows

^  Not much difference..  the coin you’ll be swapping for will be as secure as that coin’s amount of mining power swapped to. But if you’re just going from BTC to XMR and vice versa most of the time, it’s plenty secure.

I wonder what the liquidity is gonna be like.