Crypto Family DEX Grant

Name of Project / DAO / Company

Crypto Family DEX by the Crypto Family

Proposal overview

The projects white paper provides a clear view of the project, contracts, protocols, and importance to Harmony.

Note: the 0.01% liquidity fee in the expanding liquidity protocol might be changed to 0.05% before mainnet release.

Any questions aroused but not answered in there please drop in the comments.

Proposal ask

$500k distributed as such:

  • $100k in ONE
  • $100k in LINK
  • $100k in BTC
  • $100k in ETH
  • $100k in a stable coin of the team and communities choosing

It would also be helpful if the grant could cover auditing expenses.

This grant is to provide the DEX with liquidity of the essential cryptos on Harmony on release.
This grant is not to be given to the Crypto Family, but provided by the Harmony team directly to the DEX, without any control or allowance for the Crypto Family to access it.

The Crypto Family will provide the Harmony team with 500k CFC to use with the cryptos of the grant to be provided as liquidity on the DEX (ONE-CFC 100k, LINK-CFC 100K, BTC-CFC 100K, ETH-CFC 100K, USD-CFC 100K), with the launch value of CFC being 1$.

The Crypto Family will not have access to those 500k CFC once transferred to the Harmony team.

Since the Crypto Family Bridge isn’t out yet, we leave it up to the team and community to decided which wrapped versions of ETH and BTC are best to use.

Please note that the 5 selected cryptos of this grant are from our assumption that they are essential first cryptos to the DEX, if the team or community thinks there are cryptos that are better fit for that role or cryptos that should be added as 6th or 7th, please let us know in the comments of this proposal and a change can be made.

If the Harmony team sees a need to increase grant request or tokens on launch please also let us know.

Terms

The Crypto Family will follow the tokenomics set for CFC on the webpage, with a few edits in the future such as removal of IDO and adjustment of nodes presale to better suit the flow of events with the Crypto Family projects, this might also result in burning of some of the CFC originally allocated for IDO. By those tokenomics the Crypto Family own 15% of the CFC total supply on Harmony, which is 3,750,000 CFC, and if this grant is to be accepted we are not to be allowed to use those CFC as we please as they may affect the DEX negatively and with it affect this grant, and as such we saw that it would be logical to set terms to our control and usage of those CFC.

The Crypto Family would be allowed to use a max of 20k CFC per month, distributed as such:

  • 10k CFC allocated to pay team members, freelancers and cover other expenses.
    In the first month of accepting this grant the team would be allowed 4k CFC only, this amount increases 2k per month until it reaches 10k after 3 months.

  • 10k CFC allocated to DEX liquidity redistribution (e.x: Buying with 5k CFC ONE and adding it with the other 5k as liquidity to ONE-CFC, used to support high trading tokens with low liquidity)

The Crypto Family is to provide a monthly report on both these expenses with their transactions on the blockchain.
These limits are subject to change in the future if agreed on by the Harmony team and community.

Note: If the Crypto Family wishes to add liquidity to any of the prime cryptos on the DEX (ONE, BTC, ETH, LINK, Stable coin), it is allowed to do so as long as no CFC selling is included.
Example: For this example we will assume both CFC and ONE are 1$. If the Crypto Family owns 100k ONE and wants to add it to liquidity on the DEX, it is free to use 100k CFC from its own supply to provide 100k ONE-CFC liquidity.
This exception applies only to the prime cryptos on the DEX and already well known cryptos with significant market caps, as applying it on new tokens could be utilized by the Crypto Family to break the 20k CFC per month limit and cheat the terms.
The Crypto Family is also to provide an instant report in case of such usage.

Monthly and instant reports are to be submitted on the Crypto Family discord server, telegram announcements channel, twitter, and a dedicated page on the Crypto Family website.

Some other terms that should also be set is ownership over the CFC contract. The CFC contract has certain functions that allows minting and burning by smart contracts assigned as apps on the contract, these functions are meant to be used by the Beacon contract of the Crypto Family Bridge and Multichain. But until the release of those projects the DEX will be the only project using it.

Once the CF Bridge is released the ownership will be assigned to a smart contract where nodes of the Bridge decide by voting (80% needed) what new contracts can be assigned as apps on the CFC contract. But until then the Crypto Family would still have ownership over the CFC contract and the ability to link new smart contracts to it, and as such we understand if the Harmony team asks us to lock this ownership in a contract until the release of the CF Bridge.

This lock contract will allow only the Harmony team to unlock ownership and allow us to use it to link the Bridge once released, and not a moment before.

Punishments

After release of the DEX and acceptance of this grant, the Harmony team would have full access to all the liquidity provided by them to the DEX plus the 500k CFC provided for liquidity.

If the Crypto Family is to break any of the terms above, the Harmony team is free to punish us and the project as they see fit, whether that be by a warning, withdrawal of some of the liquidity or all the liquidity, cancelling of grants for some of our other projects such as the Crypto Family Bridge, or others.

Metrics for success

  • Fully functional contract (done) and DAPP, with swap, add liquidity and remove liquidity functional (in progress)
  • Audit stating the DEX is secure, bug free, and implements no backdoors

External links

We invite you all to test the DEX with us on testnet, here.

9 Likes

This is an excellent project! I love your stance on decentralization and all of the benefits that the project will provide for Harmony. I’m backing this :100:. I believe that you and your team have some of the best upcoming projects out there right now. I’m very excited to see what the future holds! Great potential :blue_heart:

This right here is awesome:

Blockchains performance is often killed by the developers building on it, by introducing high
gas consuming DAPPS and gas inefficient code. DEX swaps form the majority of blockchain
transactions, current DEX swaps consume an average of 200k gas per swap, and with
Harmony’s gas limit of 80Mil and block time of 2 seconds that would limit the Harmony
blockchain to 200 TPS. Crypto Family DEX swaps consume an average of 85k – 100k gas per
swap, allowing the Harmony blockchain to process 470 TPS.

It is a good example of how well thought through this project is IMO. That or even the little things like the “Referral System” And the fact that that it will make Harmony blockchain capable of 940 TPS with 1-second finality on Harmony, makes it that much better.

I see no reason to not fund this grant tbh this DEX is going to be one of the best that there is. Great work! Very impressive! :fist_right::fist_left: :blue_heart:

3 Likes

Awesome to see this project take off!

5 Likes

Excited for this! I’ve been following The Crypto Family’s progress, very impressed!

4 Likes

Very nice , this project will skyrocket !

4 Likes

Awesome project looking forward for it

4 Likes

I am looking forward to this project, good luck!

4 Likes

We would love to replace BTC with BNB in the grant, or add BNB as 6th crypto in the grant.

2 Likes

I think that idea of a DEX with a lower than 0.3% swap fee is a good idea.

That said, I feel like I must be missing something here.
I see in the whitepaper an aim to lower gas fees per swap, but no indicators of how that is going to be done.

I’m also having difficulty understanding why the Harmony team needs to or should provide 500k of liquidity that will all be paired with the CFC token.
I understand making all the liquidity pools CFC-pairs, but doing this could open up the potential for the Crypto Family Team to just drain the liquidity over time.

In the whitepaper, under “Why CFC” it cites the reason for not using ONE for the underlying pair as creating too much arbitrage and that being no benefit to liquidity providers, but in reality arbitrage generates a lot of the fees that LP providers receive.

Then in the following section “How does the dex level…” you acknowledge this when you explain that the protocol will own some of the liquidity, and that liquidity will generate fees, and that the prices will be kept in check via arbitrage.

You say the CFC team will be “allowed” to use 20k of CFC per month, is this meant to be guaranteed via smart contract and lockup/vestment?

You mention Punishments/penalites, and steps you’d be willing to accept for any break of the above terms, but if there’s no demonstrable lock of the tokens they can just be used to drain the asset liquidity the harmony project owns, and then any penalty after the fact is essentially meaningless.

Perhaps I’m being too critical, but I see 500k as an extremely large distribution. I see providing it as liquidity to a dex, and having it be paired exclusively with that dex’s token as extremely high risk even with retaining ownership of that liquidity, because of how easily the provided liquidity can be debased.

I have to pause and ask if the benefit of this is worth the cost, or if there is something about this project that I’m missing or is lost in translation.

To someone familiar with mercenary farmers and how they operate, what’s to prevent the value of the liquidity harmony provides being drained out by farmers and/or the team?

2 Likes

Why Harmony should support this DEX?

The DEX is unbounded, meaning any token added to it can instantly be traded for all other tokens on the DEX with no extra gas usage. This opens for much investment opportunities and help new projects launch more flexibly.

Future plans of making the DEX multichain will also make Harmony the center of liquidity and swapping across blockchains.

Please don’t think you’re being too critical, your concerns and judgement are completely logical.

Regarding your question about reducing swap fees, we achieve that through:

  • DEX fee of 0.1% - 0.2% depending on the pair
  • The code implemented in the smart contract. The DEX was built from scratch and our team is well known across many other projects we made for our logical designing and implementation of protocols. The middle crypto protocol also helps as there is no need to go sorting and looking through pairs

Regarding your point about ONE, our point here is not to eliminate arbitrage, but limit the loss liquidity providers might face, CFC acts as an index to all Cryptos on the DEX, so a move in the market moves CFC almost parallelly, meaning that a liquidity provider who provided BTC at the price of $55k won’t have people selling BTC on the DEX for $55k while the external market price is $45k, or buying it for $45k when outside market price is $55k. Either we use ONE or CFC there will be arbitrage, but since CFC moves more with the value of cryptos on the DEX, liquidity providers won’t be subject to heavy use by arbitragers.
ONE’s high fluctuating price on external markets can make liquidity providers victim to its movement. And while arbitrage is necessary to built DEX fees, it’s also our priority to protect liquidity providers from being abused so much.

Regarding your concern about Crypto Family draining the $500k with our own stash of CFC, that is completely logical to think about, our team is fully doxed, we are well known members of the Harmony community and we’re ready to use lock and gestation contracts if the Harmony team deems it needed, we are not here to try and outsmart anyone to scam, we’re open to all measures placed by the Harmony team and community.

Not to forget the bridge consume 60% less gas than other DEX’s, allowing Harmony to scale double as more with the CF DEX. You can test this gas usage on our testnet release of the DEX, link to it in the above proposal

We have had previous grants with Harmony, and we are building for the future, looking long term with plans set for years ahead for our projects and Harmony

1 Like

Thank you very much for answering my questions.

I obviously don’t speak for anyone else, but is there a special difficulty that you face attracting community liquidity? I can see that because your swap fees will be smaller, that perhaps could give less incentive for initially community liquidity to stake with you, but I would think the lower swap fees might actually generate more volume for your dex, and thus be more profitable for liquidity providers than other dexes with slightly higher fees.

It’s entirely plausible and reasonable to ask for liquidity because you plan on creating a low emission and sustainable platform, and I do not mean to assume any malicious intent. I don’t see in the whitepaper how tokens will be minted and/or distributed and I think it’s hard for anyone to assess the risk of providing liquidity without having those specifics. The way you worded the team’s share of the CFC is slightly unclear. Will the team get the 3,750,000 CFC out of a total supply of 25,000,000. Or will the team have 562,500 CFC out of a total supply of 3,750,000? How much of the remainder would be distributed via IDO, and how much rewarded to liquidity providers and over what period of time?

Whether you receive foundation funding or not, I think a dex with lower swap fees, and lower gas cost with some protocol owned liquidity has potential and I wish you the best of luck!

3 Likes

There are actually many points that make liquidity providing on the CF-DEX much more yielding than other DEX’s.

On other DEX’s, users provide liquidity in multiple pairs, for example: ONE-USDT, ONE-BUSD, ONE-BTC.
So depending on which token the user uses to buy ONE, the yield is affected, making separate yields for ONE.
On the CF-DEX there is CFC is in the middle of all swaps, meaning if a user provides ONE-CFC liquidity, then no matter what tokens the user uses to buy ONE, the user providing ONE-CFC liquidity is gaining from the fees.
So as you can see instead of splitting the yield of ONE into many liquidity pairs, in one liquidity pair on the CF-DEX the user owns as much interest on their ONE as all the other pairs combined, resulting in maximum yield for liquidity providers.

Other than that the DEX has much incentive to attract more swaps:

  • Investors and users are attracted to the CF-DEX due to low DEX fees and low gas fees
  • Users looking for the welfare of the Harmony chain will be attracted to the CF-DEX due to it’s low gas usage and positive impact on the Harmony blockchain performance and TPS
  • Referral program of the DEX, attracting users and their friends to use the CF-DEX for swaps, and encouraging users to invite other users to the DEX.
  • Management program of the DEX, introducing advanced decentralized trading features, and attracting much users and investors to use it for better trades.

Regarding the CFC supply, the original plans for that can be found on our coin section of the website, however due to the change in flow of our projects these plans are subject to change and total supply is subject to decrease by more than 5Mil CFC.

The Crypto Family would own 3,750,000 CFC, and while the public sale seems much unlikely due to the release of the DEX, we are still planning on making the nodes sale to allow CF Bridge nodes to acquire CFC without price fluctuation, the price would be equal to that on the DEX but lacking much fluctuation, of course nodes have to follow terms such as gestation periods, and lock periods for bad behavior.

On release of the contract the Crypto Family would own 3,750,000, and the total supply of CFC would be 3,750,000 , once the CF Bridge comes out, an app contract will be linked to the CFC contract to mint the CFC allocated to CF nodes, and for the nodes sale. The amount of CFC minted at the end of the nodes sale will become the new total supply of CFC on Harmony. ‘Please note that the max supply during this period will be 25Mil, so no more than 25Mil CFC is possible to exist at the end of this period’

These plans are still in the study and not final, but these are the most likely plans to be used.

3 Likes

Yes, the website had a split on the initial coin distribution and how that will be split, but, again, perhaps I’m missing something, but I see no breakdown of the ratio between initial coin distribution, initial team supply, and supply to be used as rewards to stakers. I understand those numbers might not be finalized and you have to allow yourself some freedom to adjust them depending on the amount of liquidity you secure for launch, but they’re also relevant to risk potential liquidity providers might be taking on and I’d imagine you have a rough estimate of a ratio in mind. I do see that your planned APY’s seem within reasonable bounds of inflation though.

2 Likes

Thank you a lot for your questions, they help introduce the project more to the community in details.

Regarding to your concerns about CFC distribution, you seem worried about the amount that will be used as incentive farming for the DEX, and while that amount is still being set, we don’t expect it to have impact on the value of CFC as we are not planning to allocate much CFC for that or not even allocating any if deemed unneeded.

The APY users will earn from providing liquidity is already at max and most probably 3x-5x more than what they would get in other DEX’s due to the middle crypto protocol and due to the non profit nature of the DEX which allocates all the DEX fee to liquidity providers.

1 Like

The proposal is for $500k, I see nothing here that would warrant that amount, even if just for liquidity that is owned by the team. A dex is not unique to the chain and if the project is unique and provides value to it’s users, it will not have a hard time generating it’s own liquidity.

also bad form to shill your project in the Twitter spaces with Li.

We have changed the CFC tokenomics accordingly with the flow of the CF projects and the need of CFC.

With this change in tokenomics here are some points related to the grant that should be cleared.

  • The 500k CFC provided as mother token (main liquidity pair) for the $500k grant will be from the ecosystem development allocation.

  • The 10k CFC allowed to be withdrawn monthly to team members will be from the protocol development.

  • The 10k CFC allocated monthly to DEX liquidity redistribution will be from the ecosystem development allocation.

  • If the Crypto Family wishes to add liquidity to any of the prime cryptos, that CFC will be from the ecosystem development allocation, and once that liquidity is withdrawn, all CFC including what was made as rewards from DEX fees will return to ecosystem development allocation

Please also not that 10k CFC allocated per month for the team is the max allowed, but not what we’ll be using, our team will most likely be withdrawing less than 2k CFC per month, and will most likely never need to withdraw 10k CFC per month. The 10k limit was chosen as an emergency number, only ever to be reached in cases of emergency or in the future if we see a need to expand our team and our budget.

1 Like

Regarding the fourth point.

If the Crypto Family wishes to add liquidity to any of the prime cryptos, that CFC will be from the ecosystem development allocation, and once that liquidity is withdrawn, all CFC including what was made as rewards from DEX fees will return to ecosystem development allocation

If a team member gets their ONE paired with CFC from team allocation to add to the liquidity of one of the prime tokens, then at the time of the withdrawing, if the amount of CFC withdrawn is less than the amount of CFC initially provided for them (Result of an increase in the value of CFC compared to ONE), the user is to use the extra ONE they got (extra ONE is: Initial amount of ONE supplied - Amount of ONE on withdraw) to buy back CFC and return to ecosystem development allocation.

If the user gets more CFC and less ONE (Result of the value of CFC dropping compared to ONE), extra CFC is used to buy the user just enough ONE to give them back their initial instalment in liquidity.

The end goal of this is to always return the CFC back to the ecosystem development allocation without any CFC missing. If 1000 CFC where used by the CF team to pair with funds of the team to add to the liquidity, then ~1000CFC is to be returned in any of the both scenarios, a slippage of 0.1% is allowed.

Slippage is due to the fees applied by the DEX on adding liquidity and swapping when needed in the above two scenarios.

Please note all of this will be managed via a smart contract.

1 Like

If this grant is to be accepted the Crypto Family team asks that the Harmony team cancels the $50k grant originally allocated to the Crypto Family Bridge and use it to help other projects.

The $50k grant of the Crypto Family Bridge was to be used to cover audit expenses and help provide a small initial liquidity for CFC if the IDO doesn’t go well.

With the CF-DEX, users and nodes can acquire CFC from the DEX smoothly and in big volumes, and our team has no necessary need for the $50k anymore. The allowance of CFC allocated to our team per month should be enough to cover the audit expenses.

With that said, if this grant is accepted, the $50k CF-Bridge grant will no longer be necessary and we’d like to see it given to good projects in need of it in the Harmony ecosystem.

2 Likes

Affirmative. We’ll look into the other proposal and circle back soon

3 Likes

This is a great project with a great dev behind it. I truly hope we can approve funding for all Crypto Family projects because IMO, taking into consideration other projects that have been approved for grants, I see no reason at all to not fund this one as it is one of the best I’ve seen come up so far. Both the Bridge and DEX. And I’m there will be many more great things to come from this team in the future as they grow and build. :blue_heart:

1 Like