⚖️Liquidity Pools

Important note: Please be aware that our protocol is currently only accessible on devnet and the contents and technical specifications of this chapter may be subject to change.

Our liquidity pools are designed to provide strong incentives for liquidity providers to contribute their funds. With our pools, liquidity providers can earn generous rewards of 86% of the fees generated by each pool, no matter which type of pool they choose. These rewards are distributed instantly to liquidity providers.

Pool types

Our protocol supports two types of pools - weighted pools and composable stable pools. Weighted pools are ideal for assets such as $USDC, $SAX, or $RAY and composable stable pools are designed for stable assets such as $USDC/$USDT or $SOL/$mSOL to provide a reliable and predictable trading experience.

Liquidity pool characteristics

• They allow up to 8 assets per pool

• Users can add or withdraw only one asset to or from a pool

• Balanced or unbalanced LP token withdrawals are possible from a pool

• They allow flexible asset weightings of e.g. 90/10%

• The swap fees are between 0.1% and 2.0%

• The swap fees are adjustable over time by the pool initiator

Dynamic/flexible liquidity pools

When a liquidity pool is created, the token balances can be chosen flexibly and do not stick to the typical 50/50 weighting. Instead, our pools also work with a weighting of e.g. 95/5.

Additionally, the swap fee of each pool can be adjusted dynamically by the pool creator, based on the total liquidity and trading volume of the pool. This means that creators can increase fees during the launch of a new pool when liquidity and trading volume are low, to attract more liquidity providers. As trading volume increases and the pool becomes more established, the fees can be gradually reduced. The fees can range between 0.10% and 2.00% per swap, which offers a variety of options for projects to bootstrap liquidity.

Single-sided liquidity providing

Our pools support multiple assets, and users or our protocol can deposit or withdraw single assets to our pools. This allows for single-sided liquidity providing, where a user can contribute only one asset to a pool that contains multiple assets. For example, if a pool contains 80% $SOL and 20% $SAX measured in the respective USD value, a user can contribute only $SAX tokens to that pool. The rewards that the user earns for staking $SAX will be higher compared to staking $SOL, as there is less $SAX staked, and therefore a higher portion of the liquidity provider fee is allocated to $SAX stakers. This liquidity pool design reduces the risks of impermanent loss for the user and contributes to more stable liquidity pool weightings due to economic incentives like higher fees.