Whether you’re an investor, trader or even a liquidity provider of any asset, liquidity is the name of the game.
In a recent community review, we announced the consolidation of our DEX liquidity to a single platform on the BNB Chain. While it's tempting to diversify across multiple platforms, diversification comes with its own set of challenges. Let's take some time to dive into the reasons why we’re taking this approach.
Currently NUM is available on both Ethereum and BNB chain via PancakeSwap & UniSwap. Originally, multichain support was done to ensure a healthy ecosystem for NUM, however over time this turned out to be untrue. Fragmented activity on each chain and platform due to recent market conditions as well as the introduction of Numbers Blockchain has caused several unfavorable conditions related to low liquidity including:
- Less price stability : With lower liquidity, comes less stability. NUM price fluctuates heavily every time a user decides to buy / sell their NUM token. On a downside market like we’re currently experiencing, this leads to more sell pressure.
- High slippage: A user who wants to execute their buy / sell transaction via DEX may experience more drawbacks due to the high slippage caused by low liquidity.
In the face of these challenges, we’re doing our utmost effort to minimize these drawbacks by rewarding Liquidity Providers with staking rewards, however the question remains, is there something else we could do to better face this challenge?
Single DEX Decision
We are considering this decision after several discussions with our advisors and experts in the related fields. We have initiated a community review to gather more input, and given the positive feedback we received, we have decided to consolidate our DEX liquidity into a single platform: PancakeSwap V3. The pairing we will use in PancakeSwap V3 will be NUM-USDT.
This decision stems from the fact that, while most of our current staked tokens are on the Ethereum Chain in UniSwap, the majority of our community members prefer using the BNB Chain on PancakeSwap. Tether (USDT), being the most popular stablecoin, will further aid in ensuring a seamless decentralized trading environment. This decision will also address the problems we mentioned above, and offering several advantages such as :
- Improved price discovery : When liquidity is consolidated to a single DEX, it becomes easier for buyers and sellers to find each other and trade at a fair price. This is because there is a larger pool of liquidity available, which reduces the impact of individual orders on the price.
- Reduced slippage: Slippage is typically higher when liquidity is fragmented across multiple DEXs. By consolidating liquidity to a single DEX, Numbers can reduce slippage for traders.
- Benefits of PancakeSwap V3: Numbers has chosen to consolidate liquidity to PancakeSwap V3 because it is the latest and most advanced version of PancakeSwap, and it offers a number of advantages, including concentrated liquidity and multiple trading fee tiers.
- Better LP Staking Reward : By focusing on a single platform, we can offer a better staking reward for the community instead of splitting it between several platforms.
The Numbers team believes that consolidating liquidity to a single DEX is the best way to improve accessibility, price stability, and efficiency for its users and community. The team is confident that this decision will be in the best interests of the Numbers ecosystem in the long term.
We expect to migrate the Liquidity to PancakeSwap V3 in mid December, a further announcement will be made with the details of execution.