The new 4pool is a game changer for stability of $UST peg.

In xyk pools, a trade of $200k can depeg UST to $0.98. In 4pool, the same trade has a 300,000 times smaller effect, moving UST off peg by $0.00000006.

🧵/25 on mathematical design of 4pool and how this impacts UST peg: 2/ First, there are two key designs of liquidity pools we need to know about: constant product and constant sum.

Constant product is the most widely used. Might know it from @THORChain or @Uniswap. Has advantage of continuous liquidity, but can cause high slippage on swaps.

1/ I've been diving into the numbers on @terraswap_io, the native AMM DEX of @terra_money.

Using data from the amazing @flipsidecrypto I establish a lower bound of 1.5 million USD in liquidity necessary to minimise high slippage. 2/ Also, while slippage is driven by low liquidity, it is accelerated by market sentiment. Greed in particular drives slippage as investors fomo into the next must-have asset.

Full report is here on @loop_finance, but here is a thread of the key points:
loop.markets/terraswap-liqu…

1/ Diving into Pool Depths and Composition of Liquidity on @THORChain. Two major trends stand out in data:

First, LPs are observant, and employ evolving LP strategies over time. They don't just dump funds and forget about it. 2/ Second, while BTC consistently draws a lot of liquidity on each cap raise, ETH and ERC-20s are falling behind over time.

This speaks to what LPs value on Thorchain.

1/ When traders on @THORChain are fearful, they are willing to pay much higher slip fees. This is great news for LPs and their profits.

More generally, market crashes are some of the most profitable times for THORChain LPs. 2/ Hello my fellow Thorchads and chadettes! MCCN's return is on the horizon, so I have been diving into the data to see what I can uncover! This Data Digest dives deep into fee revenues, and sees how the slip-based model plays out in practice.
alexsimpson96.medium.com/thorchain-data…