AMM DEXs must discover innovative ways to attract users and their capital to increase their liquidity.
But what makes a DEX truly attractive to traders?
The answer is here:
"Show me the incentives, and I will show you the outcome."
𧡠: Solidly & its Forks; PART 2
RT for Others
But what makes a DEX truly attractive to traders?
The answer is here:
"Show me the incentives, and I will show you the outcome."
𧡠: Solidly & its Forks; PART 2
RT for Others
Two central problems with most AMMs are:
β’ Low liquidity and,
β’ Impermanent loss.
- Liquidity refers to the ability of the market maker to buy or sell assets at a fair price.
It is a concern because AMMs typically rely on a smaller pool of liquidity providers.
β’ Low liquidity and,
β’ Impermanent loss.
- Liquidity refers to the ability of the market maker to buy or sell assets at a fair price.
It is a concern because AMMs typically rely on a smaller pool of liquidity providers.
- Impermanent loss refers to the potential loss of value that a liquidity provider may experience when supplying assets to an AMM.
This prompted Curve to introduce a new AMM model π
This prompted Curve to introduce a new AMM model π
. Curve Finance $Crv is an Automated Market Maker that uses a constant product formula and a bonding curve algorithm.
It aims to address the problem of impermanent loss and increase liquidity on available pairs to provide low-slippage trading.
It aims to address the problem of impermanent loss and increase liquidity on available pairs to provide low-slippage trading.
Curve also uses a governance token $Crv and veCRV to vote on the DAOβs proposals.
β οΈ(Detailed explanation in the next thread)β οΈ
But there's a saying that goes thus:
"For every problem solved, you consciously or unconsciously create another problem."
β οΈ(Detailed explanation in the next thread)β οΈ
But there's a saying that goes thus:
"For every problem solved, you consciously or unconsciously create another problem."
. @AndreCronjeTech , however, spotted a few problems with these DEXs.
He created the ve (3,3) model with Solidly; this model was designed to improve the initial tokenomics models by Curve.
andrecronje.medium.com
He created the ve (3,3) model with Solidly; this model was designed to improve the initial tokenomics models by Curve.
andrecronje.medium.com
#Solidly is the first Protocol-to-Protocol Automated Market Maker (AMM) built on the Fantom network.
It allows the swapping of correlated and uncorrelated assets.
It allows the swapping of correlated and uncorrelated assets.
And it is based on Uniswap V2 and incentivizes fee revenue instead of liquidity, providing a unique advantage over competitors in the saturated AMM market.
Solidly was built on four essential components;
- Locking
- Trading fee
- Emissions
- Bribes
Solidly was built on four essential components;
- Locking
- Trading fee
- Emissions
- Bribes
It also introduces the concept of negative voting.
This allows users to prevent emissions from going to a pool.
However, Solidly also doesnβt come without its flaws either.
This allows users to prevent emissions from going to a pool.
However, Solidly also doesnβt come without its flaws either.
1. @VelodromeFi (Optimism):
The forked version of Solidly improved some critical drawbacks like:
π Centralized the whitelisting process for pools.
π Implemented higher swap fees to encourage productive pools.
π Removed LP boost and negative voting features.
The forked version of Solidly improved some critical drawbacks like:
π Centralized the whitelisting process for pools.
π Implemented higher swap fees to encourage productive pools.
π Removed LP boost and negative voting features.
π Reduced weekly emissions to make protocol more sustainable.
Some upcoming developments for Velodrome include:
- UI overhaul and improvements
- Optimization of voting through a relay
- New pool types, upgrades to voting mechanisms
- Zapping and composability of veNFTs.
Some upcoming developments for Velodrome include:
- UI overhaul and improvements
- Optimization of voting through a relay
- New pool types, upgrades to voting mechanisms
- Zapping and composability of veNFTs.
2. @Equalizer0x (Fantom):
π Equalizer addresses the gap left by Solidly's downfall and the migration to the ETH mainnet.
π It has adopted elements of the Solidly model to create a sustainable DEX that rewards holders and revolutionizes the traditional DEX model.
π Equalizer addresses the gap left by Solidly's downfall and the migration to the ETH mainnet.
π It has adopted elements of the Solidly model to create a sustainable DEX that rewards holders and revolutionizes the traditional DEX model.
π Equalizer differs from Solidly in essential areas such as:
- Shorter max veLOCK period
- Fairer initial token distribution
- Sustainable fee structure
- No negative voting and a bonus for Ve locking.
- Shorter max veLOCK period
- Fairer initial token distribution
- Sustainable fee structure
- No negative voting and a bonus for Ve locking.
π It also aims to increase $ETH trading pair volume, particularly on the Fantom chain, which currently has a disproportionate $ETH volume compared to other EVM-compatible chains.
3. @SatinExchange
π SatinExchange is a liquidity marketplace and stable yield on @0xPolygon
π Unlike other ve (3,3) exchanges, SatinExchange governance power comes from the locked SATIN-CASH LP tokens.
This is to ensure deeper liquidity on SatinExchange always.
π SatinExchange is a liquidity marketplace and stable yield on @0xPolygon
π Unlike other ve (3,3) exchanges, SatinExchange governance power comes from the locked SATIN-CASH LP tokens.
This is to ensure deeper liquidity on SatinExchange always.
π Locked SATIN-CASH LP earns a share of your poolβs transaction fees, bribes, and emission rewards.
4. @3xcalibur69 (Arbitrum):
Like others, @3xcalibur69 has also implemented changes to its tokenomics, but with added improvements, such as:
π Introduction of algorithmic minting to enhance the sustainability of the protocol's token.
Like others, @3xcalibur69 has also implemented changes to its tokenomics, but with added improvements, such as:
π Introduction of algorithmic minting to enhance the sustainability of the protocol's token.
π It aims to be a Tri-AMM with volatile and stable-swap pools and lending/credit functionality.
π 3xcalibur has a multi-swap feature that enables users to exchange multiple assets in a transaction.
π 3xcalibur has a multi-swap feature that enables users to exchange multiple assets in a transaction.
5. @HermesOmnichain (METISDAO):
π Hermes also centralized the pool whitelisting process to prevent large holders (whales) from creating personal pools, voting on them, and collecting all the rewards.
π Introduced a one-week vote lock to fix the bribe-farming exploits.
π Hermes also centralized the pool whitelisting process to prevent large holders (whales) from creating personal pools, voting on them, and collecting all the rewards.
π Introduced a one-week vote lock to fix the bribe-farming exploits.
π Omnichain DEX and with concentrated liquidity.
π Hermes has also revamped its tokenomics by introducing a burning mechanism.
This replaces the previous continuous management-intensive locking mechanism with a more hands-off approach.
π Hermes has also revamped its tokenomics by introducing a burning mechanism.
This replaces the previous continuous management-intensive locking mechanism with a more hands-off approach.
β’ I will stop here today!
β’ Follow me @SamuelXeus for more insightful content.
β’ Like and RT the first tweet.
β’ Anticipate a detailed part 1
β’ Follow me @SamuelXeus for more insightful content.
β’ Like and RT the first tweet.
β’ Anticipate a detailed part 1
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