Comment on page
What are the Risks?
Nothing in life comes for free - and definitely, nothing in crypto does. If you're planning to put money into TensorSwap you should understand the risks involved.
- If you put 10 NFTs into the protocol (let's say you set up a 10% delta)
- and the price 10x's from here
- you would have been better off holding the NFTs than providing liquidity because your order will have sold the NFTs gradually at prices lower than 10x
One counter-argument to IL is that for most of us - we simply don't know what the price is going to do. We might suspect the NFTs to do ok (otherwise we probably wouldn't hold any) - but how much is ok? Should you sell at 2x? 5x? 10x?
The great thing about setting up a TensorSwap order is that you don't need to worry about it.
Because the order sells off NFTs gradually on a curve, you can simply tell it to sell "from 2x to 10x" and forget about it.
Putting anything into any protocol is risky because it can get hacked and drained. There's no shortage of precedents in crypto history.
The good news for you is:
- ✅ There have been FAR fewer (literally by a magnitude) hacks on Solana vs Eth. This is because Solana's programming model is more complex but ultimately safer.
- ✅ At this point we're keeping the protocol closed source to reduce the attack surface, while we do the necessary security checks.
- ✅ We're the same team that wrote Gem Farm by Gemworks - a staking protocol that has been open-sourced from day 1 and that's used for staking by over 60% of NFT projects on Solana. Gem Farm has never been hacked or drained for ~12m since it's been released.
It's important to say that just setting up an order doesn't guarantee it gets taken.
If you set up a LIST order to list at 20 SOL when the floor is at 7... well there might not be any activity on that order for a while.
This is especially important when it comes to market-making orders, which you're probably setting up to make fees.
Unless the starting price of a collection-wide bid/listing order / market-making order is set up relatively close to the global floor price - don't expect much activity.
The risk you're taking on here is that you set up an order, come back a month later, and find it hasn't sold/bought anything. That would have been a waste of your capital / NFTs that could have been earning a return elsewhere (eg in staking).
✅ The good news is that we've writtenSetting up your Market-Making Order - an entire page that goes over all the config params & gives you 3 simple templates (low risk 🟩, medium risk 🟨, high risk 🟥 to use for your MM pool).