My fellow retards,
Phon/ongod recalls when V dropped a post about an automated market maker with shared liquidity. It would use a simple formula:
x*y = k.
x and y are coin quantities in a pool. k is their ratio. A working AMM will keep k as a constant as it scales x and y based upon a market participant’s desire to buy/sell one of those tokens. This works really well when x and y are large numbers. If the market is too shallow, you get huge slippage, and the system will not work properly.
Hayden, who wasn’t a dev, took Vitalik’s thoughts and implemented them. The project became Uniswap and Hayden became a billionaire. Big win for the Ethereum soybois. Phon/ongod jests…Hayden seems like a good person and the ecosystem is much better because of his hard work.
Now quite a few in our community have wondered what kind of dex could exist in the phonon context. For a brief refresh; all phonons are essentially private keys that exist in a bit of hardware segregated from the world we all know. Nobody has access to those keys, they exist within hardware and cannot be extracted. So now imagine you have crypto from 25 DIFFERENT L1 networks all stored on a series of these cards.
How can someone trade assets between them? The phonon protocol does describe how an atomic swap can happen between two cards. That is essentially a solved problem. The problem is nearly all DEX traffic does not happen between two participants. Instead it happens with one participant and a liquidity pool (such as what uniswap provides). So the next question is; can phonons be pooled to form their own liquidity pools?
This is challenging to imagine. Nobody knows which assets exactly exist as phonons, or their quantity. How do you go about discovery and where do the pools exist? Can a smart contract pool exist for phonons? It seems like the answer is no, because there is no global state to modify for phonon. What can happen is more or less a bulletin board model. Your Phonon client can post prices and assets you would accept for a series of phonons you have on your card. Your Lattice1 can act as this server of sorts. It will auto-sign any incoming transactions to accept one of your posted offers. Further, a server could be built that coordinates the entire bulletin board and will group offers together to allow a participant to take offers from more than one seller. It’s a bit more complex than x*y=k, but it is feasible.
It is important to remember that innovation requires one to venture into the unknown. The systems we use today will be reimagined in the phonon context, will incorporate phonon’s privacy and scalability, and will wind up familiar but not the same.
This is the way.
The PHONON DAO braintrust grows stronger every day.
Join the Discord and grow together with it.
Targets for the marketcap of PHONON DAO remain:
$1b by Q2 2022, $12b by EOY.
On the high end, $300b marketcap in 3 years