If I had asked people what they wanted, they would have said faster horses.
Henry Ford
The Henry Ford quote is fake but all the Hivers that want faster horses are real.
I do not blame them for wanting a better way to exchange different tokens than Uniswap offers. There is some different technology present at Hive(-Engine) so why not build the better tool based on fast and feeless transactions?
The answer is - wait, there is none. Noone is asking the question.
Everyone wants to replicate Uniswap and fix the disadvantage of lower amounts of money in the liquidity pools. That is backwards thinking.
Ethereum DeFi Is Built Around Avoiding Transactions
With the gas fees they have, noone should be surprised. The thing is, you need a lot of tokens locked up in the pool to allow your potential customer make his $10k transaction in one shot and get a reasonable rate.
In a better world, the customer could make a $5k transaction, wait for the rate to be pushed back closer to equilibrium, then make a second $5k transcation and find out that paying the second gas fee was cheaper than paying an inflated slippage (the penalty for making too large of a transaction).
Hive DeFi Should Be Built Around Avoiding Slippage
In a perfect world, the customer should be able to make thousand $10 transactions as the slippage is negligible (as long as there are players on the other side that keep pushing it back to "correct" price in a timely fashion). Obviously, in the real world, the incentives for the liquidity providers need to exist, so you always end up paying some for the priviledge of picking the direction the tokens flow. Anyway, the point of this mental exercise is different.
Ethereum needs wallets that are ready to put both tokens in the pool and keep them in, allowing for single large transactions.
Hive-Engine needs wallets that are ready to rapidly (and repetetively) trade a small amount of the overpriced token for the underpriced one allowing for frequent small transactions.
Proposal 206 Wastes Money
I think Proposal 206 is the same waste of money as the HBD Stabilizer is. Contrary to popular belief, HBD Stabilizer does not burn/print HBD - it always prints and then throws all the HBD at the internal market so that the people willing to undertake the risk (with the conversion process) have more opportunities to act. Proposal 206 is set up in a similar fashion - subsidising someone's business. As a rule of thumb, if a business needs to be subsidised, it means people do not really want it (else they would pay). IMHO, Hive DAO should pay one-time bounties for building tools that work. It should not keep pouring water into broken barrels.
But the real deal is to provide people with services such as: Check the X/Y pair every 30 seconds and trade 10 Hive worth of tokens if the price is below/above Z.
That way you can survive with low incentives for the Liquidity Providers (aka the people putting the tokens in the pool) - preferrably based on transactions fees. The true liquidity providers are those who farm the deviations from the fair price. It is true that the customers need to wait some time before their full trade (now split into multiple transactions) realises. But if they are in a hurry, noone can stop them from going for a bad price with an instant trade, can't they?
Devs, do you need a $130k/year proposal for coding such a tool?