Proposal: Usage of a TWAP/VWAP bot for tokens buyback Overview: I want to mitigate sandwich attacks at the same time as keeping a flow of buyback for the token so that it would spike less and be more efficient in the buyback period. Motivation: The token has too many spikes and it does not seam consistent, and it should be paying a lot more than usual because of the lack of liquidity when the team is selling such tokens. Implementation: I would advise changing the exchange from being Binance to begin being Pionex or use a 3rd party bot for TWAP or VWAP or maybe both strategies, so that:
It spreads out the transactions since a TWAP bot would buy every few seconds to keep a steady buyback
It decreases market volatility when the buyback occurs
It could be made using 3 different strategies: daily or weekly or both:
3.1 Daily: all the revenue would be allocated daily for a TWAP using a low time buyback
3.2 Weekly: all the revenue would be allocated weekly for a TWAP using a low time buyback
3.3: Both: 50% of the revenue would be allocated daily and every week the remainder would be allocated in another TWAP to be spread in the whole week
I would suggest using something more vanilla like Pionex since it will still use Binance order book to make it’s purchases as well as having the TWAP bot ready.
If the VWAP strategy is made the default, I would still recommend using a weekly VWAP strategy in conjunction with a daily TWAP (or vice versa), because the TWAP would keep the buying pressure and the VWAP would optimize the buybacks when it has dips
However I do not know any vanilla options for VWAP and it would need more development time as well as knowing how to create one… Maybe a DCA (without selling) would also work
If using a DCA bot I would suggest 3commas because they have a QFL strategy that waits for a small drop before buying an asset and it can be used with percentages of balance. Like → start buying after a 3% dip under the 1hr support and keep buying after every 1%
Than manually, every day/week, someone from the team stops the trade (without reselling the tokens) and start it again
The objective here is to maximize the amount of tokens the buyback can buy
Btw I do know that buying at a DEX (like 1inch or pancake) leaves the trail in the BSC scan, however I do think that Binance and other CEX have APIs to get transaction history for audits if needed to provide proof.
The idea is not to change anything in the AV, but the buyback and burn program, instead of being a one time purchase or like 10-20 in the span of a week in 1inch, use bots and other tools to consume liquidity in a bigger order book
We originally did buybacks on Binance instead of on-chain but there were complaints from the community because it “looked like” by sending tokens to Binance, there is a centralization risk, so we switched to doing it on-chain even though there is a higher cost.
Burning already happens on chain and I don’t see advantages of using a bot instead of random burns. If you can do a backtest I can consider, but for now I need the empirical evidence before you can convince me.
IMO:
I would rather have 10 consecutive deflationary weeks than one big one. Marketing wise and price wise. Big buybacks will result in more arbitrage so less burn. I think people shouldn’t worry at the price atm it will catch up eventually.
but not all of our weeks were deflationary, from a marketing point of view it would not be better to block them with burning and announce that we have all deflationary weeks. now you can do it.
What’s proposed in this thread wouldn’t even come close to making that happen. This thread suggest a potential small optimization in reducing trading fees, but in exchange for increasing centralization, and users have already voiced their opinions that they don’t want that.
That is literally the point here
How it is done today: Once/twice a day there will be a buyback in 1inch (that uses pancake)
So what that means? The buyback order will be big and will dislocate the price avoiding to pay the best price possible and then diminishing the buyback potential
Proposal is to use a bot to keep buying every X seconds/minutes very small orders, and such thing is impractical on chain because of fees.
This will keep the buying pressure at the same time as buying for the best price possible.
The difference in the price movement in the long run may not be that big but it will reduce volatility a lot at the same time as keeping momentum.
I would estimate something around 5%-15% better buying power because of the increase in the book size (binance liquidity is way higher than pancake) and the small orders
It does keep a centralization risk, but if you keep the “Taxes” API open for anyone, it will show the transactions and avoid leaving anything undisclosed.
I tried to find that and did not, so I assumed it was every day once or twice because of the amount of transactions on 1inch
Should have been unlucky to find them
And it is not every 30min exactly, it stops sometimes and I do know that it is not humanly possible to be online 24/7 to do so
It is also paying high fees and the liquidity is not optimal, so we are paying around 2% above market price
