Need somebody smarter than me to chime in.
I burned 10K ICP for cycles because I wanted to set up a AMM cycles/icp pool on Sonic (who are awesome btw).
Is this going to be some self sustaining public good or is it just going to get drained by people exploiting game theory?
It’s more about the game theory. Does it benefit anybody to have something “smoothing out” the ICP price or is it just a target for exploitation?
Why didn’t you just buy XDC instead and then hold? This would actually help to bring it back to peg and attract more people to trade it.
There wasn’t enough liquidity. I don’t want to hold it I just thought creating the pool could help people hedge against volatility and it may pay for itself.
In theory, it should help people hedge, but cycles are hard to predict. There is WICP/XTC pool in Sonic currently with ~140k$ in ICP. Creating ICP/XTC is more convenient. WICP is obsolete now.
A year ago XTC was around 1.3$, but something happened and a lot of XTC was sold, so the price dropped to 0.22$ at some point. Now it seems to be recovering. Cycles don’t have a ledger and there isn’t public info on who owns how much.