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> Instead, LP positions will be represented by non-fungible tokens (NFTs). However, common shared positions can be made fungible (ERC20) via peripheral contract
by qqii 6y ago
> Instead, LP positions will be represented by non-fungible tokens (NFTs). However, common shared positions can be made fungible (ERC20) via peripheral contracts or through other partner protocols. Additionally, trading fees are no longer automatically reinvested back into the pool on LPs’ behalf.
On the face of it this seems like a gas tradeoff for the liquidity range feature. It seems to me that this will promote an ecosystem of management platforms and further aggregation of funds by proxy as long as L1 fees remain high.
- chrisco255 6y agoThe LPs being represented as NFTs isn't a gas thing. There's no other way to represent your position since there are now infinite positions to take (since your range is completely customizable), they have to be represented as NFTs and not ERC20s. But the ecosystem of management platforms is correct. It's likely that protocols like Yearn will create managed liquidity pools that hold a collection of "NFLT" positions to represent a particular strategy.
- qqii 6y agoOf course, that's the only valid representation but it makes me wonder about their claims of gas efficiency and how they compared it.
- chrisco255 6y agoYeah they said there was marginal gas improvements on L1, but not sure how. Haven't read the source code yet.