I always find it interesting to write about something I don't know about. So bare with me while I reseach as I write.
I noticed a tweet from Leo Finance.
So the first thing I did was go to Coin Market Cap and grabbed these two screen shots bellow.
I don't know if the two are totally related as the tweet says 'Big changes come for bHive'. And talks about 'Next step: Oracle'. Anyone know what the Leo teams means by that?
The tweet show BTCB, ETH, BNB, CUB, BLEO and the current bHive on PancakeSwap only shows CUB, BHBD, AND ETH.
PancakeSwap is a decentralized exchange native to BNB Chain. In other words, it shares some similarities with established platforms like UniSwap in that users can swap their coins for other coins without the input of middleman services.
The only difference is that PancakeSwap focuses on BEP20 tokens – a specific token standard developed by Binance.
The BEP20 standard is essentially a checklist of functions new tokens must be able to perform in order to be compatible with the broader Binance ecosystem of dapps, wallets and other services.
Source
The Oracle model is a trading engine that borrows the market price of assets (Oracles) directly from external market leaders and uses it for the trading price. Therefore, it does not need to build its own price discovery mechanism, unlike AMM and order books.
Therefore, the traders will be referred to simply as “Takers” and the liquidity providers (LPs) as “Makers” in terms of the oracle model.
Depending on the strategy of each project team, it may vary, but basically it is taker-friendly as it allows you to trade the oracle price without market impact. The only thing traders need to be aware of is the time lag between the time the order is placed and the time the block is generated, which results in the only slippage that occurs from this time difference.
Meaning that while the taker has an advantage over other trading engines, it also means that the maker must bear the risk. Therefore, safety measures (e.g. spread, maximum order allowed) are necessary so that the maker cannot take all their assets without market impact. The subject that can exploit through the oracle distortion is the taker, so the maker also takes that risk. Therefore, the protocol must prepare a high required return rate for the position that can be unfavorable for the maker. However, the protocol spending to find the correct price continuously is just the cost of the oracle price feed, so if the protocol can receive a lot of revenue to share, it can easily meet the required return rate.
Therefore, the business is built on the basis of gathering many users (traders) in a trader-friendly manner and achieving a large-scale economy, thereby generating relatively high trading fees to meet the needs of liquidity providers.
As a drawback, theoretically, it cannot be a market leader because it follows the market price created by a third-party market leader. However, this is not a concern at the current stage where CEX accounts for more than 95% of the trading volume. It may not be too late to plan to modify the model after a great migration happens from CEX to DEX.
Additionally, all products depend on oracle, so if there is a problem with oracle, the protocol’s viability may be threatened. Therefore, the presence of a contingency plan for oracle risk is one of the important factors in determining the quality of the protocol.
Source.
Is this the Oracle that the Leo team is talking about?
No matter if I got all this correct or wrong, one thing is for sure, the Leo team is building something big. The are expanding what Leo is offering outside but part of the Hive ecosystem. It should only help build upon the community and make it better for us all.
Are we going to see PancakeSwap disapear when Oracle comes online?
Lots of questions.
I wrote this post to do research for myself. I hope you found it informative and I hope I will get some awesome feedback and answers.
And yes, this early in the morning for me, I got my brain going, I am truly alive and thriving now.
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Have a super positive day everyone.
All roads lead to Hive.
Bradley
