Questions about the Market Making Setup on Vega

  1. The reward system is interesting and unique and I like that it is diversified. However, the use of ‘siskas’ as a probabilistic measure of liquidity is somewhat puzzling. The probability an order gets filled in the next time step is likely to be random and very noisy. What is the next step in this context? Can you elaborate about the mechanism of calculating ‘siskas’?

  2. Additionally, gate risk is not favorable for a liquidity provider with an investment management mandate. It is clear that the gate risk is there to mitigate the impact of sudden illiquidity when liquidity providers opt to withdraw from markets. Would you be able to elaborate a little on how are the commitments to the markets defined? How much can a liquidity provider withdraw within a specified time frame?

  3. I see that Vega has a non-custodial set up for trading. Perhaps ideal for retail or proprietary traders, yet flovtec strives to work in an asset management framework where the capital committed to liquidity provision activities is provided by a third party. As a suggestion, Vega could integrate a custodial or asset management administration layer, I can think of the Melon Protocol as an example.


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