CSC Liquidity Pool Proposal (unofficial draft)
Please note that this proposal is a draft. It’s is currently unofficial and meant to help to design an environment that acts as a liquidity pool (“pool”) to overcome the issue of a stagnant market and swap services adding CasinoCoin.
This is an unofficial proposal which is neither supported nor opposed by the CasinoCoin Foundation. The CasinoCoin Foundation DOES NOT provide liquidity or market-making services. This is posted on my personal blog to receive feedback from the community to transform this into a working solution if some sort of consensus or backing can be reached.
Goal to archive
At stage one, the pool is set up to allow services, like uphold (“swapper”), to tap into the pool to facilitate direct crypto to crypto exchanges at a premium.
1) A party that has a license to act as a custodial service. Opibis OÜ has been granted such a license to legally provide a virtual currency wallet service. This is necessary to operate the pool as in managing the funds. (Licenses in question: #FVR001490 & #FRK001370 for Financial services, Providing services of exchanging a virtual currency against a fiat currency & providing a virtual currency wallet service).
2) Amount of coins that allow services to facilitate exchanges of a decent size without pushing markets up or down too much in a certain direction (2+% spread).
3) Some sort of accounting system (“pool management system” or “PMS”) that keeps track of who owns which amount of coins or relative percentage of the total. This is also needed to calculate rewards/payouts.
How it works
A group of people (“poolers”) enters an agreement with Opibis (to be drafted) and will hand over an agreed amount of CSC. Those coins will be added to the pool, the exact amount and all related information will be tracked by the PMS. Each pooler owns a percentage of the pool relative to his initial pay in. That percentage will determine the reward that will be paid out for providing coins to the pool. Exchanges will be facilitated at a premium in relation to the market. In this draft, we apply a 10% premium. Depending on the size of the pool, there might be a limited set for exchanges of currencies.
If someone wants to buy $1000 worth of CSC via a swapper, a request will be sent to the PMS, the system will verify the market conditions on exchanges, determine the number of coins that would be needed for the swap (“quote”) and report that back to the swapper. The swapper offers the quote to the user. If the user accepts, payment is due. If the user doesn’t accept. Nothing happens. The same logic applies the other way around.
In this example, we assume the pools has a total size of 100mln CSC, to begin with. It has been funded by 4 parties.
A 50mln (50%)
B 35mln (35%)
C 10mln (10%)
D 5mln (5%)
We further assume that the current rate of CSC (to BTC) is 0.00000010 (“10 sat”), the rate of BTC (to USD) is $10,000, and there would be enough open orders to fill that demand on an exchange. The PMS will apply its logic and offer the user 900,000 CSC based on: ((0.1BTC / 0.00000010) -10%) vs ((0.1BTC / 0.00000010) – fees) on an exchange.
The premium is now split up between all involved parties, please note that all numbers are purely made up for the example and don’t reflect final numbers.
Pool: 60,000CSC or 0.006BTC (60%)
Opibis: 20,000CSC or 0.002BTC (20%)
Swapper: 20,000CSC or 0.002BTC (20%)
(can also be a mix of CSC or BTC)
Based on their agreements pooler rewards will now be added to their initial stack or kept in a separate wallet for payouts. Opibis will either use their cut to build their stack or use it to fund operations or both. Swappers most likely will use their cut for providing the service.
Crypto that has been swapped in could also be used to buy the coins back that have been swapped out. Additional complex logic needs to be applied as well as additional agreements with exchanges/swappers/poolers.
Notes for the example above:
- The premium is applied for the following reasons: 1) It creates an incentive to buy on an exchange as this should be cheaper 2) It will cover costs for all parties involved, which will be at least: Poolers, Opibis, and services accessing the pool. (Not limited to those mentioned.)
- There needs to be a minimum to enter the pool to keep administrative efforts low. There needs to be a minimum lock period to avoid people entering/leaving based changing market conditions
- The PMS logic needs to consider several conditions such as exchange liquidity, current open orders, spread, the timespan of the validity of a quote, currently other open quotes, and so on so forth.
- Quotes need to have caps, relative to the pool size and current market conditions. In the beginning, there should be a hard cap in any case
- Grow Opibis into an autonomous liquidity provider
- Get CSCL tokens and CSC on swappers
- Offer the liquidity service to other communities
- to be continued…
- Being bought out “at rate” at a given time ending up with crypto xyz while the market has significantly shifted in whatever direction
- Enabling market manipulation of no or not good enough safeguards are in place
- to be continued…
There might be a working solution that does exactly this out there. This needs to be researched. Building the solution our self will take some time, it is not a short term achievement.
Opibis was created with one thing in mind: Having a processor for CasinoCoin and CSCL tokens who can legally process them under a license. There have been numerous conversations about the matter but we failed to reach an agreement for one reason or the other. Opibis solves the issue without being at the mercy of a partner who doesn’t understand the business.
CR8 will be the perfect example to prove that our solution works. The combination of different tools to provide a better and faster experience. Our stuff works, today, in an existing market. It won’t compete with CSC but empower it. It’s another piece of the puzzle.
Opibis OÜ holds a license that allows “Financial services, providing services of exchanging a virtual currency against a fiat currency”. We will be able to allow CSC and CSCL Tokens to utilize this capability when they are ready to be exchanged. There will be no more gatekeeping. We will outrun those who are holding us back. If you don’t want to work with us for whatever reason, we will come up with our solution. Don’t worry.
All steps are taken to work towards the ease of everyday usage of CSC and CSCL tokens. Those things might eat more time than we anticipated but it is worth the hassle. All of the work that is put into this, all the work that is done to create our solutions, all the work that is done to keep us moving, all the work that is done to remove blocker, they all just have one goal: To prove what the CSCL has to offer and is capable of, today.
People always should keep those four points in mind. They are what push us forward.
This document is v0.1 and was updated on 15.08.2020 11:19 (GMT+1)
Disclaimer: This post might contain ads, ref links, is 18+, the author’s personal view, and does not equal an official statement. I am not a native speaker which means this post is full of bad grammar and wrong spelling. Readers and viewers discretion is advised!
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