Delphi Labs has recently introduced a new AMM model called the Shared Liquidity Automated Market Maker (SLAMM). In this new model, there are several key differences from the current Astroport model:
- The slAMM model shares its liquidity across various satellite chains. In this model, liquidity can be theoretically made available to the Osmosis, Juno, Neutron, Sei, or even Kujira (if permissioned chains approves such deployment).
- The liquidity parameters in each satellite chain is governed by the Hub. Currently, its still undecided if the Hub will be deployed as a Smart Contract on a general purpose chain like Terra, or as its own app-chain, similar to that of Osmosis.
- Liquidity providers, similar to that of the current Astroport model, will have a simple UX on their own satellite chain to deposit their liquidity. The protocol will then shift the liquidity wherever its’ needed stripping away the complexities of the backend from the user. As Delphi calls it, “Deposit Once, LP Everywhere”.
Generally, I think the benefits may outweigh the risks of moving into this model, however, I do have some unanswered questions.
- What are the risks to the liquidity should there be a IBC relaying issue? Will there be an insurance fund to cover these losses?
- Should the Hub starts on its own app-chain, ideally validator fees should be covered by the trading fees alone. However, given that the current trading volume averages around $1.5mil daily, that provides about $1.642mil in annualised fees. If 1/3 of the amount is paid to ASTRO delegators, and validators charge an average 10% commission, that equates to $55k fees to validator. Will there be a change in tokenomics given that Astroport will now need to pay for its own security & this might come out from its own inflation schedule? If yes, how much will the change be from the current tokenomics.
- How will the validators vote on governance? The current governance structure for Cosmos is highly ineffective and most validators vote for the sake of voting without understanding the concepts of the proposal.
The purpose of this forum post is to determine if it’s suitable for Astroport to move into a SLAMM model. It’s up to the Astroport community to determine if this is the best path forward. If you’re supportive of this vision in general, but you have reservations on certain parameters, do voice it out here too.