Liquidity Protocol

Liquidity pools & AMM

Switcheo TradeHub's liquidity protocol features public liquidity pools (LPs) and native automated market makers (AMM) for every market.

Best of AMMs and orderbooks

Switcheo TradeHub is the first protocol to combine AMMs with a traditional orderbook DEX. Our liquidity pool module is able to interoperate with the protocol's orderbooks to simulate AMM liquidity on the orderbook DEX. Orders are also routed to third-party liquidity backstops such as Uniswap and Kyber Network, guaranteeing perpetually liquid markets.

On top of that, liquidity pools will feature flexible bonding curves, so that liquidity can be used as efficiently as possible by the AMM and earnings can be maximized.

Unequal pool weights

The protocol utilizes Balancer’s Constant Product Market Maker (CPMM) model for underlying liquidity pools allowing for users to contribute liquidity in different proportions (i.e. 30/70) as opposed to traditional LPs which are generally balanced equally.

  • As traders buy and sell assets from the pool, the amount of assets in the pool will change and fluctuate.

  • Automated Market Makers automatically adjust the prices of each asset by keeping the following equation in check:

  • Where R is the reserves of each asset, W is the weights of each asset, and k is the constant. In other words, in the absence of fees, constant mean markets ensure that the weighted geometric mean of the reserves remains constant.

Create pool

Anyone is able to create liquidity pools on Switcheo TradeHub via reference UI, Demex. To create a pool, follow our guides here.