Jan 14, 2022: Payouts for the month of December are now complete, and Polygon announcement

[deathlessdd]

@littleskunk

Ok I get that it works for you. I would like to know the steps I have to execute

Sure thing, You get paid from storj the first 2 weeks of the month You got some storj on polygon, you race to Log into Polygon Bridge: Bridge Assets from Ethereum to Polygon zkEVM because the price of the token is good and you need a good coffee asap. Then goto swap tokens Polygon Bridge: Bridge Assets from Ethereum to Polygon zkEVM

You select storj to matic you, hit review swap, You hit approve when your happy that it will work,
Then bam You have matic in your wallet.

Then you send that to any exchange that supports Matic on polygon network Like Crypto.com which I use daily and you send to your bank or debit card.

[littleskunk]

@deathlessdd

Then goto swap tokens Polygon Web Wallet v2

You select storj to matic you, hit review swap, You hit approve when your happy that it will work,
Then bam You have matic in your wallet.

I can’t select STORJ from the list. What am I doing wrong?

How about the limits? Can I swap let’s say $500 in one transaction or will that have a negative impact on the swap itself? Could I end up losing money on that step compared to L1 withdrawal and trading on a big exchange?

[BrightSilence]

@littleskunk

There is a surprising number of customers that value security and privacy more than L1 transaction fees. They still pay for the service with STORJ token.

Good point, I didn’t consider that. If privacy is a big concern it’s definitely worth the added transaction costs.

@deathlessdd

Im very suprised at this its almost like spending 30 dollars on a can of soda…

If you’re a journalist trying to protect sensitive material in order to protect your sources, you’ll gladly spend that $30 on this particular “can of soda”.

@littleskunk

This is escalating quickly. How about we focus on storage node payouts first? That will cause enough trouble for now.

I don’t think anyone is expecting this to happen any time soon. It’s just speculation about a possible future.

@littleskunk

I would appreciate if we could be a bit more honest with the risks involved.

I think the assumption was that there would be enough liquidity to do DeFi swaps on polygon. In which case it would be as simple as a swap for MATIC on polygon and send to your exchange. These transactions cost a few cents at. I do believe you need to pay in MATIC, which at the moment I can send from binance for 0.1 MATIC (about 20 cents give or take)… but the way they list it doesn’t give me a lot of hope that that will remain that way.

That would still be fine if there was a guarantee of liquidity. Which there is absolutely not. A single SNO can provide liquidity for a few test transfers, but if SNOs start using this at scale and one directional, with peak demands after payouts… It’s going to be very hard to keep a stable liquidity pool going without a significant amount of tokens invested in it as well as demand for this trading pair for other purposes than converting payouts. I think for now this is a pipe dream. It may happen at some point, but who knows when that will be.

So realistically, from what I can tell your only option right now is to send to L1… which gets you right back to paying L1 fees, which is exactly the problem zkSync has. Except with polygon you won’t be able to pay with STORJ for this.

So… you’re either betting on exchanges adopting zkSync, or your betting on liquidity availability for DeFi swaps. Either way, you’re betting on an ecosystem that still needs to grow. Meanwhile zkSync provides better security, by writing all transactions to L1 once every 10 minutes, let’s you pay in STORJ and gets us a 10% bonus from Storj Labs. For me that makes the decision quite easy.

@littleskunk

I can’t select STORJ from the list

Me neither @anon27637763 has removed their tokens from the liquidity pool. I’m guessing there is no liquidity for STORJ at all atm. I can select other tokens just fine.

@littleskunk

How about the limits? Can I swap let’s say $500 in one transaction or will that have a negative impact on the swap itself? Could I end up losing money on that step compared to L1 withdrawal and trading on a big exchange?

This would again be tied to liquidity. If there is plenty, then sure. But atm there seems to be none. Low liquidity could also lead to insane exchange rates, like 1 STORJ = 1e-9 MATIC, which we’ve seen in screenshots as well.
So yes, you need to pay attention or you could lose so much on the exchange rate that you would be better over going through L1.

[deathlessdd]

@littleskunk

I can’t select STORJ from the list. What am I doing wrong?

I also cant select any coins I have right now maybe there updating it. You can still select it in swap for gas portion which works up to 20 tokens at a time.

@littleskunk

How about the limits? Can I swap let’s say $500

I cant really answer that cause im poor. I can only transfer 30 dollars max.
I dont think it matters the fee will still be around 0.1 for every transfer. So unless your poor like me and only do transfers of 3 dollars at a time your good.

[littleskunk]

@BrightSilence

That would still be fine if there was a guarantee of liquidity. Which there is absolutely not. A single SNO can provide liquidity for a few test transfers, but if SNOs start using this at scale and one directional, with peak demands after payouts… It’s going to be very hard to keep a stable liquidity pool going without a significant amount of tokens invested in it as well as demand for this trading pair for other purposes than converting payouts. I think for now this is a pipe dream. It may happen at some point, but who knows when that will be.

How does the liquidity pool work? For safety, reason let’s switch out STORJ for wrapped ETH but keep all the other constraints. So a fixed date and everyone would like to swap wrapped ETH to matic. I would trade with the liquidity pool. If the ETH price goes down wouldn’t that be a loss for the liquidity provider? Now the liquidity provider has to take the additional wrapped ETH, send them to L1, sell them on a big exchange and move the matic token back to the liquidity pool?

What would be the incentive for the liquidity provider to keep operating like this? Especially the L2 → L1 withdrawal fee he would have to pay is worrying me.

[deathlessdd]

Im also curious how the liquidity pool works If people are swaping storj for matic wouldnt the pool sustain itself?

[BrightSilence]

This is a little out of my comfort zone, but the way I understand it is that the liquidity provider wouldn’t have to do that. The price for the swap is determined by the amounts of tokens in the liquidity pool so that all STORJ is equal in value to all ETH. Making a large trade in one direction say swapping STORJ for ETH, would change those balances so that there is now more STORJ and less ETH. So the next swap would get less ETH for their STORJ.
In active markets, other traders will immediately take advantage of that by swapping ETH for STORJ at a very profitable rate and this effect should keep the liquidity pool balanced.

However, when pools run out of liquidity this can both lead to extreme exchange rates and people eventually abusing those extreme exchange rates. Basically the more the exchange rate deviates from the actual one, the more people can take advantage of the pool by trading back. In the example of the 1 STORJ = 1e-9 ETH exchange rate a single person could drain the pool of STORJ with a miniscule amount of ETH. This is why these pools only work at scale at which points the small amounts of slippage are compensated by transaction costs paid.

Now I could be slightly wrong about some of the things I mentioned here, so please double check. But this is how I understand it currently.

[deathlessdd]

I would expect there to be thing put in place to pervent such extremes to even happen though… It would still be checked with exchange rates for the coin itself wouldnt it.

[Trooper]

With most wallets/swap ui you can set a slippage rate to be protected from low liquidity.

[BrightSilence]

@deathlessdd

I would expect there to be thing put in place to pervent such extremes to even happen though…

These blockchains are inherently programmable and there is money to be made in resolving this. Say the exchange rate gets out of wack and you now get 5% less ETH for your STORJ. That also means someone else can get 5% more STORJ for their ethereum. You’d have to make enough profit to compensate for having to send those tokens back to L1, because if you use the swap for that you would negate your profit. But if a swap is active enough, you could easily program something to monitor the swap value and swap ETH to STORJ at beneficial rates. This is kind of a race to the bottom though. The first person might want to get at least 10% out of it, the next one will start swapping back at 9% gain etc etc. At some point you will get a situation where it’s barely profitable for large players and the value stays near the actual value of the token.

The problem is that all these fluctuations are bad for the liquidity provider… so for a low interest, low use pool with a high risk of value fluctuations, they almost necessarily would have to do the above as well to remain profitable.

@Trooper

With most wallets/swap ui you can set a slippage rate to be protected from low liquidity.

I’ve seen this, but I don’t know what happens when that limit is reached. Will it just pull your liquidity from the pool, basically killing it?

[deathlessdd]

@BrightSilence

I’ve seen this, but I don’t know what happens when that limit is reached. Will it just pull your liquidity from the pool, basically killing it?

From what I see once your at the limit you cant transfer anymore. The transfers instantly fail.
this error I seen a few times.

[BrightSilence]

That could also mean it has no balance at all. But lets say that’s what happens, then it essentially becomes one directional. I guess that would work. @anon27637763 I noticed you liked some posts, did I miss anything or get anything wrong? You seemed to know your way around this subject.

[littleskunk]

@deathlessdd

I cant really answer that cause im poor. I can only transfer 30 dollars max.
I dont think it matters the fee will still be around 0.1 for every transfer. So unless your poor like me and only do transfers of 3 dollars at a time your good.

It was not my intention to let you feel bad. I am getting a small payout myself. There is nothing wrong with that.

The problem I have is that it is hard to break through all the bias in here. My experience with zkSync derivates from what I get told here. That makes me suspicious. My challenge is to extract information from a tread that feels to me more like a battlefield between zkSync and Polygon. I am not interested in that battle at all. I try to get some unbiased information.

The example with $500 is more to get an understanding of what the upper limit currently is. I don’t expect to get a $500 payout any time soon but how about 100 nodes with $5 each. It would still be the same sum and the same question. If a single $500 trade is possible I wouldn’t worry about 100 times $5. On the other side if that single trade is impossible than we should maybe utilize Polygon for small Payouts and use something else for payouts that are higher than $5 (or any other threshold).

@BrightSilence

Basically the more the exchange rate deviates from the actual one, the more people can take advantage of the pool by trading back.

Ok got that. Thank you very much. Now the people that trade backward would still need to pay the L1 withdrawal fee. How expensive is an L1 withdrawal? No blame please. I just want to get an accurate number for the following calculation. Let’s say the entire storage node payout goes to Polygon and every SNO swaps to matic. Let’s also say the liquidity is high enough for that. Now the swap itself will change the price. At some point a trade will jump in an trade backwards. From his perspective he needs to make some profit and cover the L1 withdrawal fee. So let’s assume we would be that one trader and also would have the liquidity. How much spread do we need to accept the deal? That would be excalty the spread the storage nodes have to accept right? If we know the total Polygon payout and the L1 withdrawal fee we should be able to esimate that spread to some degree right?

[deathlessdd]

No worries I was only joking but I dont transfer high amounts of crypto at a time mostly.

For the amount of nodes for a payout im assuming you would know how many people added it to there nodes, to see the sum near payout times.

[anon27637763]

@BrightSilence

exchange rate gets out of wack and you now get 5% less ETH for your STORJ.

On some DeFi platforms, the liquidity pool creator can set the maximum amount of price swing on the pool. So, the pool is not completely vulnerable to abuse in the way you’ve mentioned.

However, even with the price swing set rather tight, the price of each token can swing dramatically external to the given token pool. In that case, someone might swap within the tight pricing set to get a good exchange at a different DeFi platform.

@littleskunk

but how about 100 nodes with $5 each.

I’ve got no problem doing that…

To be perfectly upfront, if I set up a small token pool on Polygon for payout exchange each month… I’ll be collecting the SNOs STORJ. I don’t have a Lot of crypto to play with, but I’ve got enough to support a few hundred USD exchange per month for a few months. Each month, I should be able to expand the pool a little bit, if I’m careful.

However, I’m not making any promises on continuing to be the STORJ token dump. Also, I may be busy on payout day. So, someone remind me that I said I would do it.

Lastly, I won’t feel bad if I lose some $$$ because I’ve already made quite a few bad trades and lost plenty of value. There’s a learning curve to crypto, and it takes time that I don’t always have.

[Trooper]

@BrightSilence

I’ve seen this, but I don’t know what happens when that limit is reached. Will it just pull your liquidity from the pool, basically killing it?

Probably depends on the implementation. On uniswap (L1) the swap gets canceled, if it drops below the ‘minimum tokens received’ calculated from the slippage.

[BrightSilence]

@littleskunk

How expensive is an L1 withdrawal?

I’m not entirely sure and haven’t been able to find that info easily. It was mentioned in the other topic a few times. Like here:

@jensamberg

Ok. I tried to transfer Polygon Token via the bridge today. And it cost me 49 $.

But this is inherently a transaction on L1, so it will be at least the ERC-20 fee, with a little bit on top. I imagine this will be fairly similar to zkSync withdrawals, though numbers I’ve seen quoted so far seem a little bit higher. Of course this is entirely dependent on gas price anyway, so it will fluctuate a lot. I’d say calculate with $50 for now, you can always pop in a better value if you find a good source for it. Of course, you would probably wait for a low fee moment to transfer to L1 anyway as that doesn’t necessarily have to happen right away.

I’m sure there is also some way to automatically retrieve this fee and even automate that part.

[svet0slav]

@TheMightyGreek

Can’t you just accept things as they are ?

No.

@TheMightyGreek

Please just be happy that they added polygon as a payout option

I am.

@TheMightyGreek

wasn’t it you who was constantly saying that polygon would solve all the payout problems?).

No I just asked, if it was possible, because it seems more convenient. It turned to hot topic and then to reality. Actually, it was I, who said to others to be patient till this works out.

@TheMightyGreek

I hope this message doesn’t come out as rude.

No. Not at all. I was trying to understand why you mentioned the things you did. No worries at all.

@littleskunk

I would appreciate if we could be a bit more honest with the risks involved. Let’s say I get my $20 storage node payout on Polygon. What would be the next steps? How do I move these $20 to one of the big exchanges? For each step, I would like to know the transaction fee involved and if the fee can be paid in STORJ token or if I need to deposit some other token first.

This is what interests us all here. This is why I asked…

@svet0slav

On my topic here there seems to be quite the concern about no liquidity and the ability to swap STORJ for some token, which could be transferred over Polygon to an exchange, since exchanges do not support STORJ over Polygon, yet . How do you plan to further contribute to this new solution, so SNO could get their payouts and actually use them for smaller fees?

@jensamberg

Ok. I tried to transfer Polygon Token via the bridge today. And it cost me 49 $.

Not sure why you would want to do that. We need a solution for L2 because of the faster cheap transfers. See my question above.

[anon27637763]

@BrightSilence

I’m sure there is also some way to automatically retrieve this fee and even automate that part.

Yes and no.

The fee estimator in Metamask uses the target contract to try to figure out how much the interaction is going to cost. Ethereum blockchain has a gas value for each Op Code.

For a detailed look at Op Codes and gas, read:

https://www.ethervm.io/

However, several functions in contracts have no set gas value due the algorithm in the code. For example, there’s a function in the ENS contract that comes back with as an estimate of gas usage.

So, with Polygon to L1 withdraw, the best estimate is found by paging through the transactions on the blockchain and finding a recent withdraw…

I suppose one could automate looking through the blockchain, but the built in estimation system for Metamask and other wallets is not a great indicator of actual costs.

[peem]

@svet0slav

or used to top up the pre-paid card your exchange issued you.

Or maybe a satellite operator (currently only Storj Labs) could pay for SNO to such a card?