Welcome to the Hummingbot Newsletter! Hope this issue finds you and your loved ones ❤️ safe and strong 💪.
Published each month when we ship a new Hummingbot release, this newsletter serves a regular dose of updates about our latest features 🤖, upcoming events 🎉, and announcements from our rapidly expanding global 🌐 community!
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🚀 Shipped Hummingbot v0.39.0!
We are very excited to ship the May 2021 Hummingbot release (v0.39.0) today. This release contains:
- New FTX Spot Exchange Connector
- New dy/dx Perpetual Connector
- New Avellaneda Market Making Parameter: Volatility Sensibility
- Enhancements and bug fixes to Avellaneda Market Making strategy
🙋♂️ CEO Note: Hummingbot + Uniswap
As mentioned in the Hummingbot Q2 Roadmap blog post that we published last week, we are working with Uniswap on a Hummingbot strategy that allows Uniswap liquidity providers to dynamically manage their UniswapV3 LP positions with Hummingbot.
Today, we’re excited to announce that this new strategy, along with the UniswapV3 Hummingbot connector, is ready for testing! Since this strategy is an experimental proof-of-concept that will undergo substantial iteration, it’s on a feature branch for now, but we expect to merge it to
master over the next few releases.
I wanted to share a bit more background about the UniswapV3 connector and why we’re so excited about it at Hummingbot:
Both Hummingbot and Uniswap were conceived and launched in the depth of crypto winter (late 2018 / early 2019). This timing was no accident: both we and Hayden Adams (Uniswap’s founder) believed that a) liquidity was the core bottleneck that prevented DeFi from gaining traction, b) liquidity was controlled by a small set of crypto market makers, and c) this market for liquidity could actually be democratized.
While we took different approaches (and Uniswap is clearly a lot bigger and has made more impact on the market!), I think both Uniswap and Hummingbot both had the right general idea: democratizing liquidity provision gives everyone the ability to earn fees for doing a job previously available only to Wall Street investment banks and hedge funds.
In fact, I wrote an April 2019 blog post comparing Hummingbot and Uniswap’s approaches toward liquidity provision. Unfortunately, my (bad) take at the time was that Uniswap and Hummingbot were built for different user personas (retail vs professional):
Both Hummingbot and Uniswap are open source projects that share the same mission: improving liquidity in decentralized finance. We target different user personas who have different needs, allowing both projects to better serve the entire market.
That take seems a bit silly in hindsight, now that Uniswap is doing $20bn weekly trading volume, so there are clearly more than just retail traders there!
But it’s about more than just volume. Since Uniswap allows anyone to create a pool, there are now over 10,000 different pools, and since V3 allows for 3 fee tiers per pool, there will be even more pools, especially in the long tail, in need of liquidity. Enabling the Hummingbot community of market makers to participate on Uniswap would be a clear win-win for both projects.
While Hummingbot now has a UniswapV2 connector and amm-arb strategy, it’s undeniable that the bulk of our community are running market making strategies like
liquidity_mining or avellaneda_market_making.
That’s why I was pumped after reading the UniswapV3 whitepaper, which described a new “range order” type that gives liquidity providers (LPs) greater control and enables them to be more capital efficient. In my opinion, range orders will give Hummingbot users familiar with the order book market making a set of levers and dials that allow them to execute similar market making strategies and earn similar liquidity mining rewards with Uniswap. It’s a whole new (decentralized) world! 🦄🌈
uniswap_v3_lp strategy is initially intended to be a simple, basic bot that keeps your liquidity position active as market prices shift, and we are seeking feedback from the community to evolve it over time. In addition, we will create documentation that shows developers how to create their own UniswapV3 strategies.
We are looking forward to what the community comes up with! For example, I wonder if there’s a UniswapV3 algorithm similar to Avellaneda-Skoikov that adjusts “reservation price” based on your inventory position? 🤔
🌊 Liquidity Mining Updates
New Hacken liquidity mining campaign
A new 3-month liquidity mining campaign for Hacken with a total reward pool of 15,000 USDT has been launched on KuCoin! The reward schedule is as below:
- Reward: 1,250 USDT per week
- Eligible token pairs: HAI/USDT
- Eligible orders: maker orders placed with spreads of 2% or lower
Liquidity mining: April recap
In April 2021, Hummingbot miner platform continued its explosive growth, expanding both its user base and rewards pool. The filled order volume continued to grow, increasing almost 30% last month and achieving a total cumulative value of $1.49bn! This demonstrates not only the increasing interest of the community but also the success of the liquidity mining model as a cost-effective alternative to traditional market making services for both issuers and exchanges.
Introducing the brand new Hummingbot quickstart guide
We have launched a new quickstart guide on Hummingbot Academy presenting all the information you’ll need to run your first bot and join liquidity mining.
⚒️ New engineering blogs
Hummingbot Architecture Part 2
This new blog post by our CTO Martin Kou covers the architecture behind trading strategies - the very component that decides Hummingbot trades with your money, and the basics on problem diagnosis and debugging in live trading.
Avellaneda strategy: A technical deep dive
This post provides a mathematical deep dive into the new Avellaneda-Stoikov market making strategy we’ve launched in v0.38, explaining how we modified the original Avellaneda-Stoikov model for the cryptocurrency industry, along with how we simplified the calculation of key parameters.
🎙️ Latest Hummingbot Live Episodes
Have you watched our latest episodes of Hummingbot Live, a weekly live-streamed show on our YouTube Channel happening every Friday (5:00 PM PT)? Check out the replays! 👇
Don’t forget to subscribe to our YouTube channel and click on the bell 🔔 to allow notifications. You’ll never miss any Hummingbot’s new videos and live streams!
👋 Last few days to join OpenDefi Hackathon, and earn $4,000 Hummingbot bounty rewards
We are excited to sponsor the first Open Defi Hackathon! As an open-source project, our team is always happy to see community contributions, and we are constantly improving our procedures for integrating with external contributions.
Each of the two bounties we sponsor will reward participants with a 1,500 USDT prize for the winner and 500 USDT in tips distributed to meaningful submissions.
Watch the replay of Hummingbot Workshop to learn to navigate Hummingbot codebase and understand how to create a strategy -
🍿 Crypto snacks
A curated list of recently published content about crypto trading, #DeFi, and other topics that might be interesting for Hummingbot users and developers.
🍇 Trying to understand the basics of futures work and what's unique about Bitcoin futures? Check out this tweetstorm. (Disclaimer: No financial, trading, or investment advice intended. Do your own research before trading.)
💬 Get involved!