LIP2 - Specifications of LuaSwap production

LuaSwap
1

LuaSwap v1.0 is tentatively scheduled to launch on October, 30. LuaSwap 1.0 is a fork of Uniswap with the following additions/ adjustments:

Swapping fee is raised to 0.5%
Metamask recently launches a swapping aggregator with the fee >0.8% on top of liquidity protocol fees. LuaSwap pools have the best liquidity in the pairs we specializes in, so it is expected that the protocol will still be used widely with 0.5% swapping fees.

Edit: LP voting will decide the fees between 0.4% and 0.5%.

Addition of a time decaying LP withdrawal fee ranging from 0.1%-0.5%
The benefits of having a LP withdrawal fee has been discussed here https://research.parsec.finance/posts/amm-tradeoff In short, small withdrawal fee will encourage long-term LP, and create a more healthy liquidity providing environment. This feature will be implemented in LuaSwap for the first time in the AMM space.

Edit: Flat fee in percentage upon withdrawing is chosen for implementation. LP voting will decide the fees between 0.1% and 0.2%.

LuaSafe for LUA stakers
0.05% of the swapping fees will be used to market-purchase LUA (0.45% of swapping fees going to LP). All withdrawal fees
will also be used to market-purchase LUA. These LUA will be rewarded to LuaSafe stakers proportionally.

Edit: There will also be a LuaSwap withdrawing fees. LP voting will decide the fees between 0.25%, 0.5%, and 1%.

LuaSwap is planned to be live with these features + LuaSwap info for analytics. Furthermore, LuaSwap SDK will be further optimized using LUA, stablecoins, TOMOE, ETH (more can be added in time) as the base pairs for routing swapping orders. This optimization will improve the efficiency and swapping pricing of LuaSwap.

2 Likes
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Edit is added for the voting options and changes.

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So, your great idea is forking Uniswap v2 and increase fee to 0.05%, especially when you have no serious liquidity except for pairs/token you control, while staying on Ethereum. So basically Lua is the fork of sushiswap, which is the fork of uniswap. When Uniswap v3, with Optimism roll-up is imminent.

You are comparing to Metamask fee when they are yield-aggregator, and they are revising their fee after the backlash from the community.

99% of Lua buyers in SEA doesn’t even understand impermanent loss and you want to introduce withdrawal fee…

Gosh.

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Not sure what your points are. Here are some of the replies/ corrections:

  • The biggest user group from a country for both TomoChain and LuaSwap is from United States. 99% from SEA is just wrong as we have significant users from more than 20 countries. In general, we build product for crypto users, not for any countries/ regions in specifics.
  • We set fees at a reasonable level. It is not obvious what is the optimal one and it is one of the open problem https://www.paradigm.xyz/open-problems/index.html
  • We do not control either TOMO or LUA, and they are owned by thousands of community members.
  • LuaSwap will launch on other public chain in time.
  • LuaSwap was launched without a seed funding, or pre-mine, and there is no share reserved for the core team. However small a milestone LuaSwap can achieve is a success to us. Thanks for your feedback.
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Luaswap, is fork of uniswap and Uniswap has much liquidity and you want luaswap to compete with uniswap by having higher fees than uniswap. Where is the logic in that? Is Luaswap competing with uniswap or MetaMask wallet?
Luaswap growth metric target is TVL, therefore you’re competing with Uniswap, logic dictates that you reduce the swap fees to below or equal 0.3% or provide other competitive advantage not offered by uniswap.
Why would you using pricing based on metamask wallet pricing instead of uniswap, you need to meet the tvl targets.
I suggest 0.3% swap fee or lower initially.

Luaswap needs to boostrap growth and the key metric is tvl, high fees vs uniswap constraint Luaswap growth. No, no high fees!

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Final specs and voting update here Voting for key parameters in LuaSwap 1.0

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Voting’s results:

Vote 1: Swap fees. 0.4% in which 0.05% fees going to LUA holders, and the rest going to LP.

Vote 2: LP withdrawal fees. 0.1%; Assuming LP earning 10% APY, 0.1% withdrawal fee means a minimum of 3.65 days of liquidity providing to break even;

Vote 3: LuaSafe withdrawal fees. 0.5%; Assuming LUA staker earning 10% APY, 0.5% withdrawal fee means a minimum of 18 days of staking to break even upon withdrawing;

1 Like