Pecunia.Finance Funded By SifDAO To Build A Connector Between Sifchain DEX & Hummingbot!

5 min readMar 22, 2022

We are pleased to announce two new partnerships & funding for our flagship project, Nexum.

We are thrilled to begin our ecosystem with two strong partners and 700,000 ROWAN (est. $70,000) funding. After a thorough proposal and shared enthusiasm, our sponsor SifDAO hosted an on-chain proposal which passed with a resounding YES, meaning Pecunia.Finance will receive funding for the Nexum project, a connector between Sifchain & Hummingbot. With the integration of the connector, Hummingbot and Sifchain communities will be able to take advantage of arbitrage opportunities across all the markets provided by Hummingbot for the pairs listed on Sifchain DEX.

Tell us about Sifchain!

Sifchain is an ecosystem committed to creating a blockchain and cryptocurrency world where any asset across the globe can move freely between different blockchains and do so quickly at the cheapest price possible. Sifchain DEX is a decentralized exchange (DEX) that enables users to swap digital assets from a wide variety of blockchain ecosystems in one place, by connecting all major blockchains together using advanced bridging technology called ‘Peggy’. Currently, Sifchain enables routing from Ethereum main net to the Cosmos Ecosystem. This is accomplished using Peggy from Ethereum to Sifchain, and via IBC from Sifchain to the other Cosmos-based blockchains. In the future, up to 25 major blockchains will be able to interact seamlessly through the Sifchain interface. Sifchain is governed by SifDAO, who represent the core community of the Sifchain ecosystem.

What does Hummingbot offer?

Hummingbot offers a user-friendly, high-frequency trading bot and online “miner” dashboard. The bot is open source software which allows traders to automatically execute AMM and arbitrage strategies between centralized and decentralized exchanges, based on pre-defined market criteria. Since the release of Hummingbot, it has enabled 3,200+ individual market makers to fill $2.4 billion in trading volume. Daily volume averages $12.3M and was hitting a high watermark in Feb/2022 of $17M. The current release supports 72+ token issuers and exchanges.

What is Arbitrage?

High-frequency trading bots seem like a tool of the FinTech elites…and it sort of is. Thanks to organizations like the Hummingbot Foundation, such sophisticated trading tech is now available to enthusiasts and the broad public. In the case of Hummingbot, the software is designed around a specific type of trading called ‘arbitrage’.

Arbitrage has existed for as long as physical currency has and reflects the concept of natural market-price equilibrium. When two or more currency exchanges have different prices for one or a pair of currencies, both exchanges wish for the market equilibrium to be realized as quick as possible (due to a desire to maintain reputation as market-price-accurate and reliable exchange). This can only occur when traders of both markets realize the arbitrage opportunity by placing bids and offers which counter-balance the price difference in the two exchanges. Hummingbot allows this counter-balancing to occur automatically, quickly, and according to user-defined parameters.

Pecunia.Finance — What, Who & Why

Pecuina.Finance is a DAO that leverages opportunities in the DeFi industry to build solutions and generate capital to push humanity into the future on the basis of sustainable & fair technology. We achieve this by perusing a wide range of financial and technological products and proprietary strategies.

About the team: Our development team has considerable experience in OOP, OOD & OOA with Python & Java, several years developing applications with React frameworks using TypeScript and JavaScript, as well as DevOps experience. The dev team is supported by business consultants sharing a combined 30 years in IT, PM, and CRM (both on- and off-chain). Besides participating in countless blockchain projects privately, each member brings with them a network of contacts spanning popular platforms, protocols, and exchanges.

First project is called Nexum and, as mentioned above, consists of an integration between Sifchain and Hummingbot to allow the realization of arbitrage opportunities.

With the increasing usage of IBC, we are witnessing the key role that blockchain integrations play in Web3. Technologies like Hummingbot allow decreasing market inefficiencies while democratizing access to sophisticated financial tooling. As a considerable amount of DEXs rely on arbitrageurs to reflect outer market prices, relying on efficient markets is a fundamental piece to achieve a healthy decentralized financial ecosystem. Algo-trading technology can also empower DeFi markets, by increasing arbitrage’s feasibility in low-depth pools.

From a broader perspective, integrating existing open-source crypto tooling across different decentralized ecosystems can help blossom this industry.

Sifchain DEX swap fees are proportional to the price impact generated. This implies that for pools with very low depth, a successful arbitrage can only be performed in small amounts. For this reason, arbitrageurs are discouraged from manually performing arbitrage in those low depth pools, thus preventing those pools from being sufficiently attractive to LP’s.

In the case of Sifchain, a Hummingbot connector encourages an increase in Total Value Locked (TVL) and Trading Volume. Opening the doors to algo-trading on the Sifchain DEX contributes to increasing Trading Volume, which consequently increases Liquidity Providers (LP’s) revenue. As more LP’s join Sifchain motivated by increased profits, pool depth would consequently increase. This would allow arbitrageurs to arbitrage with higher amounts, creating a virtuous cycle that boosts Sifchain importance within the DeFi industry.

Anticipated Outcome

Integrating Sifchain with Hummingbot will allow algo-traders to successfully arbitrage on low depth pools, increasing trading volume and consequently increasing the profitability of LP’s. The increase in the pool’s APY will stimulate LP’s to add more liquidity, deepening those pools. As pools get deeper, they become more attractive for traders who trade more consistently on those pools, triggering further interest from LP’s. This cycle will be beneficial for Sifchain by increasing its Trading Volume while allowing the Hummingbot community to easily perform algo-trading on Sifchain. The future release of Peggy 2.0 will allow Sifchain to easily integrate EVM chains, unlocking further arbitrage opportunities across several ecosystems, increasing trading volume, and consequently LP’s revenues.

Scope of Funding

What we want to achieve

With the secured funding, we have access to the resources needed to complete a connector between Sifchain DEX and Hummingbot.

What we build

Exchange connector
Trading system
Endpoints

Pecunia.Finance in the near future

The Pecunia.Finance is preparing an FAQ to answer different types of questions that have been received from the community. The FAQ will be available on Pecunia.Finance website and announced when available.

As the Pecunia.Finance team is growing and continues to receive interest, we have recently made advancements in the creation of the Pecunia.Finance DAO. We will soon release more information about this and the different ways of participating in the DAO.

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Thank you for reading, please feel free to contact us over any of our channels for more information.

-Pecunia.Finance Team