Liquidity Book: Feature Overview #3 ππ
Surge Pricing is a feature that applies a dynamic fee to Trades, this mitigates the impact of IL, helping to protect Liquidity Providers. Dynamic fees are innovative for AMMs and Liquidity Book is pioneering a novel way to do it...
Surge Pricing is a feature that applies a dynamic fee to Trades, this mitigates the impact of IL, helping to protect Liquidity Providers. Dynamic fees are innovative for AMMs and Liquidity Book is pioneering a novel way to do it...
The Liquidity Book #AMM comes with a novel designed Volatility Accumulator. This mechanism measures instantaneous volatility during Swaps, without relying on outside oracles, or complex calculations that can often lag.
Having an accurate volatility measure allows Liquidity Book to change swap fees accordingly:
π Decrease fee
If volatility is low and there is little risk of IL
π Increase fee
If volatility is high and LPs need protection again IL
π Decrease fee
If volatility is low and there is little risk of IL
π Increase fee
If volatility is high and LPs need protection again IL
The Volatility Accumulator is possible due to the innovative bin architecture. The VA counts transactions that move between bins. Because each bin on Liquidity Book represents a fixed price, a change between bins caused by a Swap essentially move the price, creating volatility.
Surge Pricing is therefore a feature that helps to protect Liquidity Providers, aiming to improve profitability when providing liquidity and helping to maintain liquidity depth, during volatility. With depth in Liquidity, Traders will be able to execute Swaps with more efficiency
Liquidity Book is a next-gen DEX built to offer increased efficiency, flexibility and composability versus existing AMM solutions in #DeFi
Deploying on #Avalanche ... π
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Deploying on #Avalanche ... π
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