Hey Guys, thanks for the input. One thing that I wanted to add is that we are a generalized decentralized automation solution, so limit orders and stop losses are only some of our use cases, we can automate anything on-chain, for example avoiding impermanent loss or recurring payments, etc. So if there is any other use case that you can think of for Balancer just let us know.
Now going back to the limits and stops, it is true that the volume for limit orders is not significant yet. In fact we have heard of similar numbers for Sushiswap and their limit order function. However, on the business side (DEXes) we have been receiving interest in the limit order and stop loss functionality as a differentiator, the DEX space is very crowded.
On the other hand for users, limit orders on a DEX is very new and stop losses are not existent, so we believe that it will take some time for users to get used to the concept of a limit or stop on a DEX. We have been interviewing several end users, and although the more experienced DeFi traders are able to run their own scripts or get a third party tool to place conditional orders, the less experienced folks or the new people in DeFi find that its a big pain not being able to manage their trades without their own manual input, the real pain however is that they are not able to manage their loss while they sleep. So while it’s true that limit orders are a nice to have we found that not having stop losses is the real pain point.
The demand might not be there yet, but it is very early in the space (< 500k monthly users for Uniswap do regular swaps.) in order to onboard the next million people into DeFi, AMMs need to provide similar tools to centralized exchanges. We think that limit orders and stop losses are here to stay and it’s just a matter of time until all DEXes adopt limits and stops either for differentiation or because of end user demand.
Now its also true that Balancer doesn’t position itself as a high frequency trading platform, but it does market itself as an automated portfolio manager and “trading platform”, so high frequency or not Balancer still plays in the trading market and as the market moves towards integrating these additional trading tools it becomes a question of whether Balancer wants to be in the “first movers” group or wait out until there is proven demand to make a decision.