The price spread is still there, and the coins have already been set to withdrawal. But for the next period of time, it can’t sell, and it can’t top up margin. Even when the next opportunity comes, you won’t be able to catch it.
What I find hardest when trading is the state of funds: the money isn’t lost, and it’s still yours—but it can do nothing.
There are three key points in DuskEVM’s current testnet for returning funds: first apply in the EVM, then submit a proof to L1, and after the security checks finish, finally claim the funds on L1. All three steps require Gas, and the last two also require leaving DUSK in advance on L1.
When I first saw “both layers use DUSK,” I thought it would be pretty convenient. Plus there are more fee touchpoints, so the token demand would sound thicker. But once the principal is also put into the accounting, my stomach sinks: for the same coin, you still have to split it across two pockets—one portion is used for trading, and another is reserved specifically to cover the return fee. The principal already on the withdrawal road also has to bear market volatility and the cost of missing the next round of opportunity.
I算了一下: a cross-layer arbitrage trade needs to cover far more than just three Gas slips. There are also hedging costs during the waiting period, the capital tied up in fee reserves on both sides, and the loss from missing the next round of market conditions.
I think this capital flow will slowly filter people out. Smaller funds will be discouraged first by fixed fees; those who frequently move positions will be held back by the waiting time; and in the end, it will likely be large funds that pre-stock on both sides. Cross-layer processes connect two markets, but they can also further concentrate liquidity among a few players.
That’s exactly why I remain cautious about $DUSK : the more you get charged during withdrawal each time, the token’s total demand may not actually grow. Total demand still depends on whether traders, after completing one round, are willing to go for a second or third.
Going forward, I’ll watch these four sets of data: total withdrawal fees, the median completion time, how long the slowest 5% have to wait, and the users’ repeat usage rate.
Only when the money can safely come back and still catch the next order counts as liquidity. Liquidity is what can continuously support token demand.
#dusk $DUSK @Dusk
What I find hardest when trading is the state of funds: the money isn’t lost, and it’s still yours—but it can do nothing.
There are three key points in DuskEVM’s current testnet for returning funds: first apply in the EVM, then submit a proof to L1, and after the security checks finish, finally claim the funds on L1. All three steps require Gas, and the last two also require leaving DUSK in advance on L1.
When I first saw “both layers use DUSK,” I thought it would be pretty convenient. Plus there are more fee touchpoints, so the token demand would sound thicker. But once the principal is also put into the accounting, my stomach sinks: for the same coin, you still have to split it across two pockets—one portion is used for trading, and another is reserved specifically to cover the return fee. The principal already on the withdrawal road also has to bear market volatility and the cost of missing the next round of opportunity.
I算了一下: a cross-layer arbitrage trade needs to cover far more than just three Gas slips. There are also hedging costs during the waiting period, the capital tied up in fee reserves on both sides, and the loss from missing the next round of market conditions.
I think this capital flow will slowly filter people out. Smaller funds will be discouraged first by fixed fees; those who frequently move positions will be held back by the waiting time; and in the end, it will likely be large funds that pre-stock on both sides. Cross-layer processes connect two markets, but they can also further concentrate liquidity among a few players.
That’s exactly why I remain cautious about $DUSK : the more you get charged during withdrawal each time, the token’s total demand may not actually grow. Total demand still depends on whether traders, after completing one round, are willing to go for a second or third.
Going forward, I’ll watch these four sets of data: total withdrawal fees, the median completion time, how long the slowest 5% have to wait, and the users’ repeat usage rate.
Only when the money can safely come back and still catch the next order counts as liquidity. Liquidity is what can continuously support token demand.
#dusk $DUSK @Dusk