Adding Limit and Stoploss orders to Balancer

We would like to propose adding stop loss, limit orders functionality and enabling the prevention of impermanent loss on Balancer through a decentralized solution offered by Autonomy Network.

About Autonomy: We are a ConsenSys - Tachyon backed project that offers an off-the-shelf generalized automation solution powering the Web3 with on-chain conditional execution. A decentralized network built on users, executors and the blockchain. We have also received grants from Polygon and NEAR.

How Autonomy Works: https://blog.autonomynetwork.io/how-autonomy-works-simple-6c0059a2ee89

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sounds good! do you need help to do this?

Hey @DavisRamsey Thanks for showing interest!
If we do the implementation by forking Balancer’s UI and doing a PR, we need to be sure that the community will actually accept it?
Also, would there be a grant we can apply for?

you can apply for a grant here Balancer Community Grants

but as far as doing a PR and accepting it, that is really up to the team I believe. not sure they will actually include this in the main UI tho. This would probably be a separate site.

Thanks for reaching out, @Libero

My first impression is that there is not tons of demand for limit orders in the dex space: 1inch did 1.6 billion dollars in volume over the past 7 days, 128 million of which through their limit order protocol. So ~8%. And that’s in a high volatility week, when it seems reasonable that many limit orders would have been filled.

Curious to hear other people’s thoughts. Do people frequently use limit orders on 1inch or matcha?

Personally I don’t think the current balancer site is geared towards having limit orders. I think a different site that is more aligned to trading (i.e. high frequency swaps) where balancer is the backend for liquidity to support that trading is a different story. I look at our friends at slingshot as an example, they are positioned as a trading site and are not necessarily trying to attract LPs.

limit orders are a “nice to have” but nobody really cares too much imo

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.

Cheers

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If your team has the bandwidth to build something like this on top of Balancer I’d say by all means submit a grant application

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Thank you! A stop loss feature for LPs sounds interesting. If you can build an independent UI to manage that I think it would make for a good grant proposal.

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Looks like the Grant application is now closed. Will try submitting our proposal on Discord if that works

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