Proposal: Blacklist of Arb Bot

This proposal was discussed in the 6/10/24 Roundtable of Dogs meeting.

Summary here Meeting Summary for Roundtable of Dogs Meeting #3 6/10/24

8 Likes

My natural sentiment is a No. We want DECENTRALIZATION. This is action is not that.

6 Likes

No for me to. Must stay decentralized. CryptBro made some great points above for anyone just joining

5 Likes

I loved this discussion.

In the end, I can only bring one point of view (mine) and hearing from others and being open to it has always served me and others well.

I think the right decision was made to not take action.

8 Likes

Does anyone think we should revisit this? This bot has done nothing but drain us for the past 7 months. I think we should reconsider the blacklist on 8404. Look at the price now compared to when this proposal was 1st brought up.

I say we reconsider the stance and bring this to a vote for the community.

3 Likes

If we’re going to start blacklisting arb bots, we should verify each wallet that’s an arb bot and take care of them all at once.

This won’t stop more from joining in or addresses we’ve blacklisted from changing wallets and starting it up again.

IMO, our focus needs to be on bringing volume in that will prevent a CEX and DEX price from deviating so largely that provides the arbitrage opportunity.

5 Likes

Do you agree that we should at least just vote on it so the DAO can make the final call?

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Absolutely. I never would (nor could) stop a vote. Just voicing my take on the matter.

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I agree! That’s the beauty of the DAO. The people will decide!

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Be interesting to see what happens if it is black listed…will it just switch to wallet 8505…Do we know the outcome? There was discussion over at LTD around black listing a bot did it happen?..

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I don’t want the DAO to take a negative action with no result

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How much of an impact are folks expecting the blacklist to make?
Litespeed estimated a 5-10k reduction in sell volume per day in the proposal. That’s only a fraction of a percent of the daily trade volume I see on CoinGecko (315k). I’m not sure the juice is worth the squeeze, but could be converted if there is a bigger picture I’m missing.

3 Likes

Election is the best way. Lets do it.

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This at least needs to go to a vote so the DAO can decide. I just think its that simple guys. I am not saying that I even know what to do. I don’t need to. It’s a DAO so let the DAO decide. That is all I am saying. If we cant agree on that, what are we doing here?

3 Likes

Since we are sharing our opinions here, yes, it can make sense to reconsider and take this vote to the DAO.
First of all, the K9 team cares for their holders, and caring for their holders also means they they care for the health of the KNINE token, the liquidity, and of course take action against manipulation if appliable.

It is true that this is DeFi, and traders should be free to trade and take advantage of arbitrage opportunities, but no project wants to see their token being traded to the dirt, and their holders losing faith on it, while one or more bots take advantage of it.

There are two main facts that make me agree on taking this proposal to be voted on the DAO:

  1. The 8404 bot is not a holder, it buys and sells to take instant profit, take advantage of arbitrage, the price difference among the markets;
  2. The price on CEXs is often considerably lower than on DEXes like Uniswap, and the 8404 bot is exploiting this heavily during the current market conditions, constantly dumping the price on DEXes since the volume currently is still low;
  3. Most KNINE holders use DEXes, and use Bone Crusher for passive income, so they increase the price/liquidity, which the 8404 bot is draining for profit.

Since the bot is draining the liquidity for many months (since launch), and this affects all holders, it can make sense to allow the holders to vote on the DAO. This gives the holders a chance to minimize the damage that the bot is causing, at least during this slow part of the market and the volume is still low.

Just sharing my opinion about the potential benefit of having a vote on the subject, since it can contribute for the health of the project.

6 Likes

First, I want to acknowledge this: we are partly responsible for the situation we’re in. Specifically, everyone who voted “yes” to change the original tax plan (and yes, I include myself in this, as I voted for it too). The impact of the arbitrage bot would have been far less significant if we had stuck to the original plan of gradually lowering the tax as intended.

Now, to the difficult part: Should we blacklist the bot at this stage? Honestly, I don’t think so. It’s too late to act now, especially with 75% of the supply already in circulation. Should we have blacklisted it back in May? Yes, I believe that would have been the right move.

That said, I also admit that I don’t have the perfect answer, and I think many of us here might feel the same. This is a complex decision, and it’s not easy to know the best course of action.

Let me use a comparison from my experience as a trained chef: Imagine you’re at a restaurant, looking at a menu full of options. You’re unsure what will pair best together, so you ask the chef for their recommendation. Then it’s up to you whether to follow their suggestion or not.

I think we should approach this situation in a similar way. Let’s consult those who are more knowledgeable and experienced in these matters,whether that’s the devs, analysts, or anyone with relevant expertise. Then, once we have their input, we can hold a Snapshot vote to decide if we want to act based on their recommendation.

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What can we do about the price difference anything ? can we add a fee or something just on the vex to equal out the price? I know if there was you all
Would have thought about it already.

At the least I think there should be a 30 day test block on them to see the effect it has.

2 Likes

With the resurgence in popularity of this topic I do believe the Roundtable should consider letting token holders vote on this topic. While I do not have any additional comments to add to the thread, I do know other partner projects (specifically LTD token) have enabled this function to blacklist 8404.

I do think the best source of information is to ask their community how it has done for them, as without hearing a first-hand experience there are a lot of unknowns

8 Likes

The 8404 bot and its connected network had a devastating impact on LTD in the beginning. To mitigate the effects of arbitrage, we made the decision to ban the bot with the help of Mr. Lightspeed. Although it was only active for two weeks, it remains the #2 trader for LTD. Banning the bot had an immediate and positive impact, with a noticeable price increase within the first week.

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So sounds to me like it could be a wise decision plus timing it around the Jan 31 unlock could make it more effective.

3 Likes