A new usecase for AMM protocols that is starting to emerge is that of doing hypebeast style limited edition product releases on bonding curves. The most recent one was for the Reverse Land Nikes on Zora.
Foundation is another project that sells art and other limited edition products with bonding curves. https://withfoundation.com/
These are innovative use cases for bonding curves but still suffer from the same issues as other IDOs. Bots will be able to frontrun the sales and “average” customers wont be able to get into the sales. Zora’s site crashed during their sale of Reverse Land and many buyers were unable to participate. We have recently seen projects use MESA as their exchange of choice to perform IDOs due to the unique nature of the gnosis protocol matching mechanism. Generally these sales have worked pretty well, even if there have been some tensions with user experience and solver uptime.
As the maintainer of Mesa, the dxDAO is in a somewhat unique position to market the gnosis protocol as core infrastructure to other projects that may want to use these functionalities and don’t want to build everything in house. Furthermore, the upcoming launch of dxSWAP adds another layer to the stack in also providing the AMM infrastructure that could be used after the initial sale.
I have been having a hard time trying to understand what the value add for dxSwap is over the other dexes in the space, beyond the an ephemeral “governance.” The one thing that no competitor has direct access to is the gnosis protocol, and given its complexity, probably will not in the near future. Finding ways to leveraging this could be the key to differentiating dxswap from other similar products without resorting to vampire attacks and migration farming. This would probably require additional complexity added to DXswap to add custom curves to the protocol (like FDN does), but if that means that Mesa and DXswap can become the infrastructure layer for a whole range of new product listings, then it is probably worth it.
Interested to hear what people think of this idea. I do not have the technical chops to even begin to think about implementing it, and I am but a lowly forum member without many crypto connections. So hopefully you guys can take some of these ideas and run with them.
This is a cool idea. Financial applications are starting to work now, but this infrastructure also opens so many opportunities in commerce more generally. It’s also a good example of how Mesa/DXswap could work together.
Three quick thoughts:
@JohnKelleher suggested that DXdao ‘underwrite’ personal token sales by supplying DXD in a DXswap pool. I wonder if there might be some use case like that on Mesa with hype products?
(I believe) Mesa is having trouble with initial sales with an average price below $1000. @exponent is exploring a personal token sale and ran into this issue, iirc. I think its gas and solvers related.
Auctions (Mesa) have a lot of potential. Obviously with frontrunning protection, but I think we should be thinking more creatively about other opportunities (like this)
This could be related, but it relies on an active participation by the dxDAO in managing these sales. My thoughts revolved more around providing the infrastructure to layers/companies above that would then do the heavy lifting on attracting sellers. The dxDAO could also get involved in these higher levels, but the infrastructure seems like the part of the equation that the dxDAO could excel at. I see no problem with exploring both!
UX work would be one of the primary efforts to explore. Right now Mesa is hard to use, as well as expensive, and I’m sure there are other issues like that above that I don’t even know about. Although UX may not be the best description. Maybe a framework to allow others to easily create their own UXs on top of the contracts. Getting out of my league here.
I did have a thought while writing this that the DXDao should run and finance work on improving a solver for the gnosis protocol. Maybe you guys already do, but it seems like a no-brainer use of funds and adds value to the current products. Plus it could generate relatively passive revenue.
One Solution Idea: To address the current issues with Gnosis Protocol around smaller USD notional orders typically happening with NFT products and social tokens, could we create:
Joint Price Pools for buyers
We (or someone) create a series of consolidation price pools at set prices that buyers can pool their purchase interest into prior to enter the Gnosis Protocol framework. Say a product-related NFT is expected to sell for around $100.
We create a series of five price pools for anyone with under $2000 buy order, at say $50, $75, $100, $125, $150 price points. As a smaller buyer, you enter into one of these Price Pools.
Each Price Pool is submitted into Mesa to participate in the sale.
The Price Pools will act as individual large buyers, participate as per normal in Gnosis Protocol, and benefit from any potential price improvement.
If a Price Pool is successful, all participants get their share of the the sale from the Price Pool.
Organizers of Price Pools can take a small fee (say 0.5%) of the Pool if successful.
This small creation allows EVERYONE to participate and can be more gas efficient.
I like this idea. It could make the experience much easier. It would be a good way to abstract away some of the complexities of the DEX. But, thinking through it I don’t see the need for prices below the initial offered price.
One of the UX challenges with Mesa is how, before there is a real price for the asset being traded, it is very hard to determine where you should set your buy at. In the MTA sale for example, many thought the sale would clear at one price, but then it cleared much higher. And the valuation method for projects is complex The nice thing about real product offerings (sneakers, hoodies, etc) is that a base price can be set and then the users can use that as a reference and say how much more they would be willing to spend over that number to get into the sale. So the UX becomes pretty easy for the bidder. How much are you willing to spend for this product. You will either get it at that price or less, or you won’t get it. Prices below the offering price are not accepted as that is the minimum price set by the retailer.
Is this an order matching engine on top of uniswap? I didnt quite get the tech from their website. They mention layer 2 a lot but don’t actually say what that means.
To me the value of DXswap is the ability to tailor it to the goals of the dxDAO. The more I have been thinking about just forking uniswap and then providing a costco model (or something like that), the less I think it is sustainable. It isn’t enough of a differentiating factor. Maybe if you already had a bunch of people in your ecosystem, but not as an initial driver to switch.
Good point. There would likely not be a need for prices below the lowest offered sale price. In some cases, I think projects could have targets goals around amounts of tokens, rather than price, and therefore may want to complete a target size at any price.