I would like to address a few inefficient points in the Sovryn protocol:
-Margin trading SOV rewards (ongoing for almost 2 years, noone knows or talks about it).
-Reduced BTC/XUSD AMM pool rewards, but it’s still used as the primary pool for margin trading.
-XUSD vs DLLR lending
-XUSD vs DLLR margin trading.
Margin trading has been subsidized with SOV rewards for a very long time. Hardly anyone talks about it, no one knows. Such rewards can make sense, if they are communicated well, if they are presented and advertised accordingly in the dapp, and if they are used. Hardly any of this is the case.
Furthermore, we have (rightly) scaled back the SOV rewards for the BTC/XUSD pool. The current strategy is all about DLLR. Nevertheless, the XUSD pool is used for lending and margin trading. The adjustments of the SOV rewards and the control of liquidity only make sense if DLLR is used consistently in the other parts of the protocol, namely lending pool and margin trading. Currently, we have increased slippage and costs in margin trading due to the reduced liquidity in the XUSD pool. At the same time, we have quite high margin trading interest rates due to the split lending pools.
The DLLR pool currently promises 0.4% apy with a liquidity of about 100k USD.
The XUSD pool promises 10% apy at just under 700k USD liquidity. The open margin trading positions might play a role here. DLLR could be used here instead of XUSD. This would create DLLR demand, exactly what is so urgently needed.
Let’s use the great liquidity from the BTC/DLLR AMM pool for reduced slippage on margin trading. Let’s set up a BTC/DLLR margin trading pair on the front end and promote trading in this pair with (the already existing) SOV rewards. Let’s present and communicate this accordingly. Let’s boost trading on the dapp. This will create very strong demand for the DLLR lending pool (instead of the XUSD pool) with a DLLR APY that is second to none. The demand for DLLR will increase, the peg will hold better, the protocol would benefit.