Proposal: Hummingbot Connector Project

Discussion
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Hi Onomy Community! We are Pecunia.Finance, a Web3 Project Management DAO which specializes in building DEX connectors for Hummingbot (High-Frequency Trading OSS). We would like to propose a project to build an ONEX Connector for the Hummingbot Gateway repository.

The following information covers the entire roadmap for such a project, but the first proposal will be for Milestone 1 alone.

Abstract

Pecunia.Finance builds connectors between DEXs and the Hummingbot community-governed repository.

Hummingbot is a free, open-source, high-frequency trading bot that executes custom and pre-built automated, algorithmic trading strategies on connected centralized and decentralized cryptocurrency exchanges. Utilizing a modular architecture, Hummingbot enables exchange connectors and trading strategies to be built independently, facilitating contribution by a globally distributed community of developers and quant-traders.

Having an ONEX Connector in the Hummingbot repository would enable algo-traders and private or community market-makers to deploy high-frequency trading strategies between ONEX and other markets supported natively by Hummingbot (both DEXs and CEXs).

Motivation

ONEX is a prime candidate for the Hummingbot ecosystem and we want to position ourselves as the go-to team for building and maintaining Cosmos-based DEX Connectors in Hummingbot. As grant recipients, we would be able to fund the bounties necessary to complete the project, maintain the DAO and thereby also our contributed code, as well as gain additional reputation.

Specification

You can find a plethora of information in our general connector proposal here: Notion – The all-in-one workspace for your notes, tasks, wikis, and databases.

Milestone 1 is a modular deliverable which can be used to decide further development and the scope thereof. A general template can be found here: Notion – The all-in-one workspace for your notes, tasks, wikis, and databases.

Milestone 1 serves as an assement to determine the feasibiliry of the overall project.

Here you can find an high-level summary of the whole project’s scope:

  • Analysis & Report
    • Estimated Scope of Project (how many milestones needed)
    • Existing Strategy Analysis (will existing strategies work or is a custom strategy needed)
    • Foreseeable Obstacles or Potential Blockers
  • Hummingbot Governance Proposal - Add ONEX Connector
    • Make Proposal
    • Campaign in Hummingbot Community
    • Vote with Pecunia Finance DAO $HBOT reserve
  • Middleware Development
    • ONEX Gateway Connector
    • Onomy Gateway Chain (unless Cosmos Chain can be used)
    • Hummingbot Client Changes
      • Client Commands
      • Strategy Compatibility
  • Documentation
    • Hummingbot Docs for ONEX Connector (and Onomy Chain)
    • Official Hummingbot ONEX Connector Guide
    • ONEX Hummingbot Guide for Onomy Community
  • Review & Merge PR
    • Create PR with Contributor Guidelines
    • Hummingbot Reviews PR and makes change requests
    • Apply any requested changes
  • Bug Bounties & Updates
    • Reserve for funding issues directly through Hummingbot Bounties
    • Small changes & reasonable fixes by DAO
  • No new features would be added to the ONEX/Onomy SDK by this project.

Rationale

The specifications are according to the Hummingbot Contribution Guidelines, set forth by the Hummingbot Community Governance (Snapshot.org using $HBOT tokens on Ethereum) and executed/enforced by the Hummingbot Foundation.

The first milestone of the project is an analysis of the project scope using a comparison of the ONEX SDK and existing Hummingbot code. The Hummingbot Gateway architecture is designed to allow multiple connectors upon the same chain. If the ONEX functionalities are compatible with the existing Cosmos Chain within Hummingbot Gateway, the additional milestone of creating an Onomy Chain base may not be necessary - saving development requirements and costs.

The analysis also reveals the probability that a custom strategy is needed or if the ONEX Connector might work with existing strategies, as some have already been adapted for Cosmos/IBC compatibility.

Reference Implementation

We are the same team which built the Cosmos Chain base, Osmosis Chain base, Osmosis DEX Connector, and created/maintain the documentation in Hummingbot for each, including the official guide. We have received grants for these contributions from SifDAO, Hummingbot Foundation, and Osmosis Grants Program.

Security Considerations

Hummingbot is a locally run program which uses an API (for CEXs) or trading-wallet private key (for DEXs) to make requests directly to an RPC for the relevant endpoints of a given exchange. Essentially, Hummingbot acts as a user would in a front-end - just much faster.

There is no discernible threat to the security of ONEX or Onomy SDK.

Author Name & Contact Information

Additional Information

Hummingbot Volumes & Statistics

Since release in April 2019, Hummingbot has enabled 3,200+ individual market makers to fill $2.4 billion in trading volume - an average of $12.3 million in daily volume, for 72+ token issuers and exchanges, achieving 100M+ in average 24h volume, with 13+ core trading strategies, and a growing user base (1M+ downloads) providing liquidity between different exchanges like Ascendex, Binance, Gate.io, KuCoin, and now Osmosis.

Hummingbot analytics are calculated using voluntarily submitted trading volumes collected hourly by participating users. As free open-source software, it cannot be determined what the full trading volume of all Hummingbot users is. Reported metrics can be found here: https://p.datadoghq.com/sb/a96a744f5-a15479d77992ccba0d23aecfd4c87a52?_ga=2.104932355.1643890758.1672704236-604918202.1670986042&fromUser=false&refresh_mode=sliding&tpl_var_environment[0]=*&tpl_var_exchange[0]=*&tpl_var_instance_id[0]=*&tpl_var_version[0]=*&from_ts=1706546253454&to_ts=1709138253454&live=true

Proposal #1 - MS1 - SDK Research & Analysis

We would like to start with a proposal for funding of Milestone 1, to determine the estimated scope of the rest of the project.

The estimated budget for this milestone is $5,000 USD (in NOM) to cover what is essentially the first steps of creating a connector, which are comparing and testing the relevant codebases for the relevant functionalities and interfaces of AMM strategies such as AMM Arbitrage (AMM_ARB) and Cross-Exchange Market Making (XEMM).

STATUS: IDEA

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Datadog link seems to be down right now but I will update if the link changes, otherwise should be back up soon.

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Thanks Nick for the detailed prop outlining the goals and initial milestone.

5k USD in NOM seems reasonable to ascertain and define the final scope of the build out.

Let’s hope the existing infrastructure you spoke of can help save the DAO time and money if some parts are composable for ONEX.

I’m assuming once the Dex connector infrastructure is in place for ONEX that anyone in the Onomy community can run bots so the project has the potential to benefit many in the community……

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This makes perfect sense. Would really push ONEX into a very fine experience as more pairs are listed and bid/ask liquidity is needed to fill orders.

I like it and support it. Thanks for the proposal PecuNick :slightly_smiling_face:

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Fully down to sponsoring this and seeing it happen. Could we have some indication on the time estimated to build it out and a rough idea of the total costs? $5k is definitely a good start, but just want to make sure the whole thing doesn’t end up coting 6 figures. Other than that, well put together and it has my vote pending clarification.

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Quick q - does humminbot have an UI that we could use to sort of MM ONEX ourselves? How does it work in more detail?

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If the ONEX functionalities are compatible with the existing Cosmos Chain within Hummingbot Gateway, the additional milestone of creating an Onomy Chain base may not be necessary - saving development requirements and costs.

the above would be sweet, think it’s no problem, right devs?

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is the cnnector live on osmosis? can we test it out? thanks for the post. i will vote yes. thanks

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This + Skip + more listing + fx stablecoins + a mobile gateway to Onomy = ONEX supremacy tbh.

Has my vote :ballot_box::ballot_box::ballot_box:

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Hi there, thanks for the feedback.

Indeed, your assumption is correct! Anyone in the Onomy community (or any other community) would be able to run the bot in as many instances as desired, with their own or included compatible strategies :+1:

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Hi there, thanks for the support!

A general estimate is 4-8 weeks but is entirely up to the specific circumstances of the codebases. As for cost, we have never exceeded 5 figures for such a project and I highly doubt that the ONEX connector would be an exception. The Milestone 1 will give everyone a more granular definition :+1:

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Long a - Hummingbot utilizes multiple interfaces, the main being a CLI GUI (ASCII-based), but also have a python/html dashboard for running multiple instances (orchestration dashboard). They are working on a Telegram interface for the coming year.

You can customize existing strategies included in the codebase or port your own python-based strategies directly into the Hummingbot client configs as a script.

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The osmosis connector is live, you can use it with amm_arb strategy. The concentrated liquidity module (amm_v3_lp strategy) had a bug which is patched with the coming next release, this week.

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Anything that makes Onomy bigger and easier for the user is welcome.

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Hey I read through and im impressed. One question - what is the cross exchange market making and how does that work? do u mean that onex could technically access liquidity from binance for example?

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idk about y’all but im just thinking about dem sweet NOM burns once this is live and volume skyrockets esp as MMs pretty much run all markets and account for a significant share of liquidity across cexs/dexs.

which other dexs is HB live on outside of cosmos?

good initiative foshu.

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You ser are a biz dev genius :wink:

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Hi Joel, thanks! You can read about XEMM here: Cross-Exchange Market Making - Hummingbot

tl;dr: yes and no. The strategy takes advantage of price differences on both exchanges but its up to the user where that liquidity ends up (called ‘balancing’). That being said, the volume, exposure, and attractiveness of price stability brought by the strategy will inevitably also draw liquidity.

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Hi Arlo, you can find current connectors here:

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Hi @everyone! Thank you for all the feedback and questions, we are excited to get started.

The onchain proposal is posted and active here: Onomy

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