| id | Title | Status | Author | Description | Discussions to | Created |
|---|---|---|---|---|---|---|
| TIP-136 | Improve Sports AMM Liquidity Provisioning Withdrawals UX | Draft | cyberduck | Removal of SportsAMM LP requirenments on withdrawals and allowing partial withdrawals | discordlink | 2023-04-18 |
This proposal suggests allowing partial withdrawals from the Sports AMM as well as removal of the staked Thales check on withdrawals.
This proposal aims to update the liquidity provisioning for Sports AMM to allow for partial withdrawals as well as remove the requirenment of the stakedThalesMultiplier on withdrawals.
Currently, Sports AMM only allows for full withdrawals of liquidity positions, which may not always be ideal for liquidity providers who may want to adjust their positions based on market conditions, portfolio rebalancing, cashflows or personal preferences. Additionally, the removal of the stakedThalesMultiplier requirnment on withdrawals, will prevent LPs from being locked out of withdrawals in the cases where the AMM has made significant amount of profits beyond the initial LP allocation. Introducing the ability for partial withdrawals and removing any conditions for withdrawals would improve the overall user experience and potentially open up the AMM to new players, who may have been put off by the current mechanisms.
Introduce a mechanism for partial withdrawals from the Sports AMM.
Liquidity providers will be able to signal the percentage of their position they want to withdraw. The minimum withdrawal percentage of 1% will be set to ensure enough flexibility while avoiding potential abuse.
The requirement to have X Thales staked per 1 sUSD of liquidity on deposit will be retained for providing liquidity. In other words, stakedThalesMultiplier will continue to be applied on deposits.
The requirement to have X Thales staked per 1 sUSD of liquidity on deposit will be removed for withdrawals. In other words, stakedThalesMultiplier will no longer be applied on withdrawals.
Test Case A
A liquidity provider has 10,000 Thales staked and 1,000 sUSD of liquidity deposited in the Sports AMM and wants to withdraw 50% of their position. With the proposed update, the liquidity provider will be able to signal a 50% withdrawal, resulting in 500 sUSD being withdrawn from their position. Assuming no epoch AMM PnL, the liquidity provider will now have 1,0000 Thales staked and 500 sUSD of liquidity, being 100% beyond the stakedThalesMultiplier of 10 allowing him to deposit 500 of sUSD liquidity if he choses to.
Test Case B
Another liquidity provider has 40,000 Thales staked and 5,000 sUSD of liquidity deposited in the Sports AMM and wants to withdraw 10% of their position. With the proposed update, the liquidity provider will be able to signal a 10% withdrawal, resulting in 500 sUSD being withdrawn from their position. Assuming no epoch AMM PnL, the liquidity provider will now have 40,000 Thales staked and 4,500 sUSD of liquidity, being 1.11 short of the stakedThalesMultiplier of 10. He will not be able to make any new deposits.
Test Case C
A liquidity provider has 10,000 Thales staked and 1,000 sUSD of liquidity deposited in the Sports AMM and wants to withdraw 20% of their position. The LP signals 20% partial withdrawal. Let's assume the round during which the 20% withdrawal was signaled resolves with +10% PnL for the week, meaning the user balance jumps from 1000 sUSD to 1100 sUSD on round end. With the proposed update, the liquidity provider will have 220 sUSD unlocked and withdrawn at the end of the round, and keep 780 sUSD in deposits for the newly started round. The deposit allowance remains 1,000 sUSD based on 10,000 THALES staked.
TBD
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