1/x We were aware that @Cryptopathic is the largest liquidity provider of NFD in both the Uni V3 and Sushi pools. The high concentration on Sushi is a big reason why we included Uni V3 support, which has better liquidity. We spoke with him, and this is our evaluation...
https://twitter.com/transmissions11/status/1429683383437721603
2/x In theory, if @Cryptopathic removes liquidity from Uni V3 completely, price is easier to manipulate as liquidity is less deep. But if trading activity stays active, as it is now, it would be hard to manipulate 30 min TWAP without anyone actively arbing the tokens back...
3/x In our opinion, this risk is more or less similar to @Cryptopathic dumping all $NFD that he owns, ~17% of supply. If he dumps all tokens, all people that long are screwed. By participating in the $NFD market, either longing or shorting, these are risks to be aware of...
5/x At this point in time there is no better option for price oracle than Uni V3 TWAP, as NFD is not listed anywhere. We are providing the only way for NFD to be shorted too. We always perform careful risk assessments when pushing out new products, and this is novel in DeFi...
4/x Ultimately, we are adding another option for market participants. An important option. Now you can short as opposed to only long. That comes with risk as we laid out, and we appreciate you for pointing this out to give us the chance to clarify...
6/x There is currently ~$4.2MM $NFD available to be shorted by users. This is a novel and potentially profitable (~1% daily premium to short) opportunity that we want traders to have, and are facilitating. There's nowhere else in DeFi that you can do this, only on Beta Finance...
7/x We are creating new technology we think is extremely cool for DeFi responsibly. This is new, there are risks, and we carefully evaluate them. Our goal is to enable DeFi to have access to new and powerful tooling, especially to counterbalance volatility.
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