I know Falcon as rather an OTC broker and liquidity manager (but not with MM focus)
The brand is pretty strong, tier-2, but very solid US firm with high standards of work. I am pretty sure they are capable to MM CVP
Still there are some questions:
How 2 mn CVP were justified? this is 30% of circ supply - as per my knowledge this is pretty significant amount for MM to use
Any KPI they promised you can share? (likely not)
What is the compensation scheme for them? (i.e. how we are defended from the MM to making profit on us, holders and LPs) - this is something that I am personally convinced Falcon wont do, but would be very useful to check out the formal approach they offered
Still I am pretty sure the 1-2-3 questions above are not disclosable by Falcon
@powerpoolAdmin hope you guys discussed with Falcon whether they can help with bringing institutions to invest in CVP’s products.
Falcon has a great network among tier-1-2-3 US (and not only US) investors
IMO, MM is what every project needs and I am glad that PP team decided to ask our opinion about that.
I am just surprised that there are not so many posts here)
Questions:
What competitors had Falcon-x to become a MM for PowerPool?
Do they work already with any other crypto-projects? Found no info about their market-making for other projects (not sure if this info is public tbh but anyway)
Very good questions Sergey. These have to be answered before the vote can go through in my opinion. The devs possibly have this additional information, it just was not shared with the community. It should be shared ASAP. Thank you.
I don’t believe this is necessary at all for powerpool - why do you need to be noticed on a CEX? Who gives a F about that. Spending time on this means you are spending time on trying to pump the token. Stop worrying about this
But It looks like it’ll go through based on the vote right now - so if that happens there needs to be clearer details on:
Are there any additional costs associated with this? Eg monthly stipend to the market maker?
Should charge a loan on it
What are the KPIs that FalconX has to hit
Are there gates across the time period whereby if milestones are not hit, either party can walk away
They said it is necessary amount for sufficient liquidity. Based on current price of CVP it is something like $4.2m in CVP, looks like reasonable amount for MM ?
You are right, we cannot share KPIs
They have solid reputation and were recommend by several solid persons (Beta/gamma testers)
And you are right - they can do a lot more for the project than just MM on CEXes, including attraction of institutional investors, door opening, etc.
We doubt that such firm as FalconX will steal money from PowerPool. It is a company with solid reputation backed by Coinbase, American Express, and others.
It is not so easy as it looks like. Institutional-grade MM can add a lot of value - attract institutional investors to PowerPool indices, request custody options for CVP from huge custodians, and basically open a lot of doors for the project
I think people undervalue the importance of market makers. Even though AMM provides liquidity, not many people will accumulate via DEX as higher gas cost makes single transaction more preferable. Having more volume on CEX will allow bigger players to buy slowly through time (for example, Microstrategy and Tesla won’t just buy BTC/wBTC via Uniswap but through CEX and OTC desks that will also help with the fiat on-ramp portion).
Can we agree, at this point, that the idea of any decentralization of this project is complete an utter joke? We can debate as much as we want, the decision to engage FalconX was a foregone conclusion…
I work for a MM, the 2m transfer is excessive…you are transferring 20% of the free float…and for what? To increase some subjective perception of liquidity…massive mistake! How is FalconX being evaluated, which exchanges will they operate on? what are the terms of the loan?
This together with the newly elected “management board” are very strong signs of the impending demise of Powerpool
I think if you work for a MM you definitely can share some alternatives and suggest KPIs. Moreover, the proposal is going to be resubmitted with clearer loan terms.
As a side note, I think such a controversial proposal and very close results for management board/PowerHouse proposal is a good sign of decentralization. People are free to vote as they wish and we’ve seen it.
How we can improve it? Refuse MM and be without MM and exposure to coinbase etc in the future?
Management board wouldn’t centralize anything. All important questions will be voted by the community.
Board just will help us to avoid votings for 100CVP payment for translators or something like that + promote the project and build new products. They wouldn’t decide - you will decide, they will work.
Just read the v2 of the market making proposal:
“The loan will be returned in 1 year, in March 2022 in CVP tokens or in DAI/USDT/USDC equivalent based on the price at the moment of transferring 2m CVP to FalconX.” https://snapshot.powerpool.finance/#/powerpool/proposal/QmTnsDzBbCsyyV1eAXUZuqcYcdBXV7XAucqt32HLbi7Hv2
Congratulations people, you just gave away a call option for 2m CVP to a randomly selected (without a transparent and fair open-to-competive-bids auction)…if CVP doubles in a year the community will only get 50% of the CVP donated (and I can’t stress enough the word “donated”)…there are no metrics to evaluate the performance of the mm, no checks and balances to control if they selling the token in the open…nothing … slow clap to FalconX…dream deal
As a member of PowerPool Management Board, I can say that these 2m CVP weren’t sent yet to FalconX. I don’t know exactly what it is based on (why there is a delay), but this deal isn’t executed yet.
Can the MB/team address this comment before transferring tokens to FalconX? If needed I’m sure the community would be willing to vote on another proposal with any necessary amendments.
Right, but put yourself in the market maker’s shoes. They do not want to have to hedge the price of CVP as well while market making for Powerindex as it would eat away at their profit margins and incur extra risk for their operation. Maybe a fairer agreement is for the loan to be returned 10%-50% in CVP and the rest in stablecoins?