LOVELY Swap- Multi-chain Supported Automated Market Generator

naimah (26)in #v3lovely • 2 years ago

Introduce

Hello friends, currently the cryptocurrency market is developing very strongly with useful projects. This has helped a large number of customers trust and participate in this market. Referring to potential projects, we cannot help but mention the LOVELY Swap — a new technology for users. Here are some discussions that support this view.

What is the LOVELY V3 SWAP?

LOVELY V3 Swap is first implemented on Binance Smart Chain, which is a multi-chain powered Automated Market Generator. LOVELY V3 Swaps offers greater capital efficiency than the protocol’s V1/V2 Swaps and fine-tuned control for liquidity providers, improving protocol accuracy and convenient pricing and configuration more flexible fee structure.LOVELY V3 Swap is first implemented on Binance Smart Chain, which is a multi-chain powered Automated Market Generator. LOVELY V3 Swaps offers greater capital efficiency than the protocol’s V1/V2 Swaps and fine-tuned control for liquidity providers, improving protocol accuracy and convenient pricing and configuration more flexible fee structure.

LOVELY V3 Swap introduces to eliminate any intermediaries in crypto asset trading. AMM Maintains a 24/7 DeFi ecosystem through liquidity pools. LOVELY V3 Swap is an unattended automated market maker implemented for multiple chains.

What features does LOVELY V3 Swap have?

The defining idea of LOVELY V3 Swap is centralized liquidity: liquidity distributed within a custom price range. In previous versions, liquidity was uniformly distributed along the price line from 0 to infinity.
The former uniform distribution allows trading in the entire price range (0, ∞) without loss of liquidity. However, in many pools, much of the liquidity is never used.

When the price of an asset rises or falls, it can break out of the price cap the LP has placed in a position. When the price breaks out of the duration of a position, the position’s liquidity is no longer active and fees are no longer collected.
When the price moves in one direction, the LP acquires more than one asset as the exchanger claims the other, until their entire liquidity consists of only one asset. (In version 2, we usually don’t see this behavior because LPs rarely reach the upper or lower bounds of the prices of the two assets, i.e. 0 and ∞). If the price returns to this time period, liquidity will increase and the LPs in the range start charging again.
Importantly, LPs are free to create as many positions as they see fit, each with its own price range. Centralized liquidity serves as a mechanism for the market to decide how to properly distribute liquidity, as rational LPs are incentivized to centralize liquidity while ensuring that their liquidity remains the same.

As the spot price changes during the swap, the general contract will continuously exchange the output asset for the deposit asset, gradually using all available liquidity over the current tick period1 until when the next check mark is reached. At this point, the contract moves to a new tick and activates any inactive liquidity in a position whose boundary at the new tick is active.
Although each group had the same baseline number of ticks, in reality, only a small fraction of them could function as active ticks. Due to the nature of the LOVELY V3 smart contract, the tick distance is directly related to the swap fee. A lower charge allows closer operable faults, and a higher charge allows a relatively wider range of potential faults.
While inactive ticks have no effect on transaction costs during the swap, transferring an active tick increases the cost of the transaction it is crossed, as tick overpassing triggers liquidity in any new position using the given tick as border.
In areas where capital efficiency is paramount, such as stable currency pairs, a narrower tick gap will increase the granularity of liquidity provision and potentially reduce the impact. price for swaps — resulting in significant price improvement for stable currency swaps.

How does the LOVELY V3 Swap protocol compare to a typical market?
To understand how the LOVELY V3 Swap protocol is different from a traditional exchange, it would be helpful to first consider two topics: the design of Automated Market Maker is different from the average limit order book based exchanges. how average. traditional hubs and how unauthorized systems depart from conventional licensed systems.
Order VS AMM
Most publicly accessible markets use a central limit exchange style, in which buyers and sellers create orders placed at a price that is gradually filled as demand changes. Anyone who has ever traded stocks through brokerage firms will be familiar with the order book system.
The LOVELY V3 swap protocol takes a different approach, using an Automated Market Generator (AMM), sometimes called a Constant Function Market Maker, in place of an order book.
At a very high level, AMM replaces buy and sell orders in the order book market with a pool of two liquid assets, both of which are of relative value to each other. When one asset is traded for the other, the relative prices of the two assets change and a new market rate for both is determined. In this dynamic, the buyer or seller deals directly with the group, rather than with specific orders left by other parties. The advantages and disadvantages of Automated Market Makers compared to their traditional ordering counterparts are being actively studied by an increasing number of parties.

The second difference compared to traditional markets is the design does not need the permission of the LOVELY V3 Swap protocol. The permissionless design means that the protocol’s services are completely open for public use, with no ability to selectively restrict who can or cannot use them. This is a departure from traditional financial services, which often restrict access based on geography, wealth status and age.

The process of formation and development

LOVELY V3 swap is a project with a clear and transparent development strategy that allows developers to confidently work to improve the platform. Below is a summary of the development of the project over the years

In conclusion

Great fun project! Transparency and predictability. Users can easily understand their project. Also, it’s a great way to offer customers, so I would urge everyone to participate in this great promotion.

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