Proposal for the creation of a new SNS for the CYCLES-TRANSFER-STATION

[levi]

The CTS gives people a choice to hold money in either the stable CYCLES or in ICP, or a mix of both depending on the user’s choice. At the CTS, users can hold ICP and CYCLES as well as many other tokens. Users can position themselves however they wish and still benefit from the stable trading market that the CTS creates.

At the CTS, people can mint CYCLES just in time if they want, or they can hold CYCLES if they want to hold a stable value.

@Mpeiz

in which there is no set exchange rate for anything. Which I also think will open the door for excessive arbitrage situations (I don’t see how it can’t).

It is the other way around. Platforms that force an exchange rate on the users are exploitable by bots.

At the CTS market, each user chooses the price-per-token (the exchange rate) of the tokens that the user is selling. We are giving the user the power to choose the exchange rate of the user’s tokens, instead of forcing an exchange rate on the user. This makes sure that each user stays in the full control of the user’s tokens, and this mechanism eliminates arbitrage completely.

This quote from the thread about bots arbitraging AMM swap pools will help you.

@levi

Someone is siphoning our hard earned money! The money that this bot is siphoning is taken out of the people’s trades! People are getting worse trades because of this. It is exploiting the fact that on an AMM (automated-market-maker) swap, the users cannot control the price at which the user sells his/her tokens. Once a user comes to make a trade in an AMM, the rate (price) of the trade is given into the hands of the algorithm of the swap, which is being exploited as is shown here! This happens due to the vague concept known as “slippage” where you hear people always saying “you need to learn how slippage works”. The fact is, no matter how you spin it, “slippage” means that the user loses control of the sale-price of the user’s tokens.

Let’s take a scenario of a person selling a car by trading the car for dollars. Imagine if the person selling the car could not choose how much dollars he/she is willing to sell the car for! That would be ridiculous.

We can get rid of this problem by creating a trading platform where the user chooses the price per token of the tokens that he/she wants to trade, and the platform will only perform the trade of those tokens with people willing to buy those tokens at that price specified. So both sides of a trade specify the price (rate) they are willing to trade at, and the platform matches compatible trades. This mechanism makes sure that a bot cannot sway the price of other peoples’ trades. This mechanism is at the heart of the CYCLES-TRANSFER-STATION trading market. The CTS is built with this mechanism, where each user chooses the sale-price of his/her tokens, and the CTS market matches compatible trades where both sides of the trade choose to trade with the same price (rate).

@Mpeiz

(the use case you provided me was a question someone asked about this proposal, so that’s a bit of a circular discussion)

The question someone asked was if the CTS can help them do more with their CYCLES then just top-up their canisters. The person was already planning on receiving payment in CYCLES for their services, and asked if the CTS can be used to trade their CYCLES. So it is not circular in the way you are saying because they were planning on receiving CYCLES as payment for their services even without the CTS. The CTS just creates more uses for their CYCLES.

@Mpeiz

People using this marketplace will know that holders of XDR/cycles have no option but to sell at a loss

That is a straight up false statement.

@Mpeiz

I’m proposing this as a closed system,

@Mpeiz

I think removing the possibility of having excess cycles in the system is better for everyone.

@Mpeiz

But again, I think the problem with excess cycles can be solved using an automated top up function as I’ve mentioned earlier. Keeping it in a closed off system,

Quote of my previous post:

@levi

The CTS facilitates the general trade of the CYCLES and grows the ability for the use of this awesome stable currency for things like payments for services throughout the whole network. These are not “excess”, these are useful for these use-cases because of the stability and value of the CYCLES.

Now I have a question for you @Mpeiz. Why do you want to try to deny the people of the world-computer community the ability to make good use of the stability and value of the CYCLES to hedge against volatile crypto downtrends, create stable trading markets, and accept payments for services at a stable cost?