Firstly, I hold a lot of $SURGE and have no plans to sell, but this makes no sense to me.
A person who puts there shares up for LP is also potentially "selling" and does not hold it in their wallet.
Either both should get dividends or neither.
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I disagree and here’s why:
If you put 1000 tokens in a seller order at $100 per SURGE on an order book, are your tokens being used for anything productive?
If you put 1000 tokens in an LP, you have to match it with 1000 USDC. You are actually investing MORE to hold that LP position (using exogenous capital). Then your paired 1000+1000 are being used to provide instantaneous market liquidity which is a net benefit to the system
How are these two possibly the same?
Both are providing liquidity are they not?
How so?
When I buy SURGE from an LP, I am buying some % of SURGE from the user who LP’d $1000 SURGE + $1000 USDC
When I buy SURGE on the order book and the seller has a sell order, I get 0% fill from him? If I do get fill, he no longer owns the SURGE anyways
They were providing liquidity nonetheless. Just not the direction we want! 😀
If I buy 1000 $SURGE and just let them sit in my wallet are they doing anything productive outside of providing the initial capital? NO
In my opinion, if I buy 1000 $surge and put a sell limit order for $100, then I have provided exactly the same benefit as someone who just lets them sit in the wallet. CAPITAL And I have provided liquidity to the market, just to the downside.
Don't we want a two-way market?