LOVELY V3 Swap is a new AMM that gives liquidity providers more control over price ranges

Introduce

In recent years, Cryptocurrencies have become a popular issue for the general public. In the cryptocurrency network, a variety of crypto-related projects and applications are born. Along with that comes the birth and development of LOVELY V3 Swap project.

LOVELY V3 Swap is an unfriendly automated market maker implemented for the Binance Smart Chain Virtual Machine. Compared to versions 1 & 2 of Swap, LOVELY Swap V3 offers greater capital efficiency and better control for liquidity providers, improving pricing accuracy and convenience. swaps and a more flexible fee structure.

Automated market makers (AMMs) are dealers that aggregate liquidity and provide traders with an algorithm. Constantly Functional Market Makers (CFMMs), a broad category of AMM of which LOVELY V3 Swap is a member, have been widely used in the decentralized finance landscape, where they are often deployed. Declared as a smart contract transaction token on a permissionless blockchain. CFMMs deployed today are generally not capital efficient. In the constant product market generation formula used by V1 and V2 Swaps, only a small fraction of the assets in the pool are available at a given price. This doesn’t work, especially when the asset is expected to always trade close to a particular price. Previous attempts to address this capital efficiency problem, such as Curve Space and Rate of Return, have involved constructing groups that use different functions to describe the relationship between the two. relationship between reserves. This requires all liquidity providers in a given pool to follow a single formula and can lead to liquidity fragmentation if liquidity providers want to provide liquidity within the range different prices. In this article, we introduce the LOVELY V3 Swap, a new AMM that gives liquidity providers more control over the price ranges in which their capital is spent, with limited impact on liquidity fragmentation. account. and inefficient gas. This design does not depend on any shared assumptions about the price behavior of the tokens.

Some features that LOVELY V3 Swap offers

LOVELY V3 Swap is based on the same constant inventory curve as previous versions but offers several significant new features:

Centralized liquidity: Liquidity providers (LPs) are given the ability to centralize their liquidity by “binding” it in an arbitrary price range. This improves the pool’s capital efficiency and allows LPs to approximate their preferred reserve curve, while still being efficiently aggregated with the rest of the pool. We describe this feature and its implementation .
Flexible Fees: Swap fees are no longer locked at 0.30%. Instead, a per-pool fee (of which there can be more than one per asset pair) is set at initialization . The initial supported fees are 0.05%, 0.30% and 1%.
Oracle Pricing Improvements: LOVELY V3 Swap provides a way for users to query recent price accumulator values, thus avoiding the need to check accumulator values ​​at the exact beginning and end of the time period. TWAP. is being measured.
Oracle Liquidity: Contracts perform the magic of time-average liquidity . V2 swaps are not upgradeable by design, so LOVELY V3 Swap is made as a brand new set of contracts, available here. The core contracts of the LOVELY V3 Swap are also non-upgradable, with a number of parameters controlled by the management as described The defining idea of ​​the LOVELY V3 Swap is liquidity. concentration: limited liquidity in a certain price range. In previous versions, liquidity was uniformly distributed along the reserve line, where x andy were the respective reserves of the two assets X and Y, and a constant . This is simple to implement and allows for liquidity to be efficiently aggregated but means that the majority of assets held in a pool are never exposed. After considering this, it seems reasonable to allow LPs to focus their liquidity on smaller price ranges (0, ∞). We call liquidity concentrated in a finite range a position. A position only needs to maintain enough reserves to support trading within its range and thus can act like a continuous pool of products with larger reserves within that range.

In particular, a position only needs to hold enough asset X to cover the price movement to its upper limit, because an upward price movement of 1 corresponds to the depletion of the X reserve. On its own, it only needs to hold enough asset Y to cover the price movement down to its lower limit. Figure 1 depicts this relationship for a position on the range [pa, pb] and the current price E[pa, pb]. real x and real y represent the real reserve of the location. When the price breaks out of a position’s range, the position’s liquidity is no longer active and fees are no longer collected. At that point its 1 We take asset Y as the unit of account, corresponding to token 1 in our implementation. Liquidity is completely covered by a single asset because the other’s reserves must be completely exhausted. If the price continues to enter the range, the liquidity will work again. The amount of liquidity provided can be measured by the value of L, which is equal to √4. The actual reserve of a position is depicted by a curve.

Liquidity providers are free to create as many positions as they see fit, each with its own price. This way, the LP can estimate any desired liquidity distribution across the price space (see Figure 3 for a few examples). Furthermore, it is the mechanism for the market to decide where liquidity should be allocated. Rational LPs can reduce the cost of capital by concentrating their liquidity in a narrow range around the current price and adding or subtracting tokens as the price moves to keep their liquidity active.

TOKENOMICS

• Token name: LOVELY SWAP TOKEN
• Token symbol: LST
• Total supply: 300,000,000 LST
• Blockchain: Bep 20

TOKEN DISTRIBUTION

• 40% to development
• 20% to marketing
• 15% to buy back lovely
• 10% to liquidity
• 10% to listing
• 5% to reward program

In conclusion

The LOVELY V3 Swap Protocol is a peer-to-peer system designed to exchange cryptocurrencies (BEP-20 Tokens) on the Binance Smart blockchain. The protocol is implemented as a set of sustainable, non-upgradable smart contracts; designed to prioritize censorship resistance, security, self-management, and operate without any trusted intermediaries that can selectively restrict access. This is a big project with strong development potential with lots of directions in the future. I believe we will win if we believe in this project


FOR MORE INFO CHECK BELOW LINKS :
Official Website: https://v3.lovely.finance/
Whitepaper: https://v3.lovely.finance/img/V3-swap-white-paper.pdf
Explorer: https://bscscan.com/token/0x019992270e95b800671d3bc1d763E07e489687B2
Twitter: https://twitter.com/v3swap
Telegram: https://t.me/lovelyv3swap
author : JennaFleming010
Profile : https://bitcointalk.org/index.php?action=profile;u=2602387
BSC wallet : 0x0f503e80969E306b13664Bd78Cac6A4589302929