As per other posts I’ve done, I’m providing high level details to stimulate a conversation and gauge feasibility/appetite. This can be detailed after
At a glance: desired outcome
- Allow LYF Farmers to view a “transaction level” breakdown of their overall LYF position –therefore enabling them to better DCA and scale in/out of a position more effectively
Starting point
This idea utilises/leverages 3 existing platform functionalities:
- Ability to view the P&L of an open position
- Ability to adjust an open LYF position by adding collateral/taking on more debt
- Ability to partially close an open position to either extract capital (TP/TL) or to repay debt
- It also utilises information about each TX available on the blockchain
What are we trying to solve? What’s the user’s need/pain point?
Note: all numbers are illustrative and whilst i tried to make them accurate, I can’t guarantee that they’re entirely correct
Let’s use a realistic scenario to explain this:
- Tom opens a $1000 Alpaca-BUSD position at 3X leverage
- On Day 0, the token price is at $0.3
- When he’s redirected to his portfolio page, he sees something along these lines
- A few days go by. Alpaca’s token price drops to $0.25
- Tom is somewhat relaxed and despite his position now sitting at -26% P&L he doesn’t stress. This is because his mate Kandleott told him that the bear market is a fugazi
- When on Day 10 he logs into Alpaca he now sees something like this
- Another few days go by. Alpaca now drops to $0.20
- Tom logs in on Day 20 and sees his safety buffer at 1.7%
- Tom frantically calls his grandma and asks for some pocket money.
- Overall, we are not really sure if he’s buying the dip or panic-adding collateral to his position, but eventually he DCAs by adding an additional $1,000 to the position
- On Day 21, Tom has now invested a total of $2,000 in Alpaca-BUSD.
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Over the next 3 months, Alpaca’s price keeps oscillating.
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Tom continues to add to his position
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On Day 100, Tom has invested a total of $5,000 into Alpaca-BUSD at different levels
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As the price recovered, he’d love to scale out of the position and return some money to his grandma.
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Equally, he doesn’t want to close his entire position because he believes he has good entries at the bottom of the range
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[Issue] As Tom logs into Alpaca, all he sees is an aggregated view
However:
- He struggles to remember his entries (he’s not very good at keeping track)
- He doesn’t know how much he can take profit on the positions he’s in green on (he doens’t want to remove his capital)
- Other things
- [Idea] Thanks to Alpaca’s new feature, he can now see the key details of each entry behind the aggregated view
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Tom can now confidently take $1,024 profit on his $0.10 entry with total peace of mind
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[Idea 2] An extra functionality to make the process even more frictionless would be to have an ability for the user to “click” on a single position and initiate a “partial closure” for that very same amount, further simplifying the process
Final considerations
- This process can be manually done using information on the blockchain and good bookkeeping. However, this becomes very time consuming.
- When leverage comes into play, this is also harder to model (the examples always assumed leverage was constant at 3X which is not true in real world)