I posted this as a reply on the other thread but I figured since there is this separate post that directly addresses this idea I should repost my thoughts here. I’m open to arguments if this idea can be elucidated in much greater detail but if I’m being honest, my threshold for convincing is pretty high in part because I haven’t heard of anything quite so involved being done on other AMMs on, say, eth.
Personally I’m not sure that I support such a complicated system. I feel like keeping it simple is better in that there are often non-obvious consequences and economic incentives to overly complicated systems (e.g., the several defi exploits that are just economic attacks rather than any code malfeasance).
I also don’t really like the idea of using the fees to create a fund that then (i) engages in LP, or (ii) does arbitrage trading on the pools. I feel it needlessly complicates the sefi ownership model from one where the value can just be tied to fees on the system to one where it’s also tied to particular (user) strategies of that system.
In other words, I think that if people want to pool resources to do (i) LP or (ii) arbitrage, that’s great and I may even contribute. I don’t think that fees on secretswap should fund this activity and I don’t want my ownership share of secretswap (in the form of the sefi I hold) to be mixed with this activity which has a separate risk profile.