iamcapote March 5, 2023, 3:39pm
Proposal for a Vesting AMM (vAMM) using some form of Open Vested Liquidity (OVL) in the cVault Finance Ecosystem. This is highly conceptual.
The vAMM is an innovative solution to the liquidity problem currently faced by the DeFi space, incentivizing liquidity providers with a vesting schedule that unlocks their funds over time, creating a more stable market, and providing greater flexibility in incentivizing liquidity providers. Additionally, the vAMM can be used to provide liquidity to other platforms, increasing the overall liquidity of the cVault Finance Ecosystem, and the trading fees generated by the vAMM can be distributed in a way that benefits the entire ecosystem.
Features and Benefits:
Customizable Vesting Schedules: The vAMM offers customizable vesting schedules for LP tokens, which allows investors to receive a combination of LP tokens and single-sided rewards on a vesting schedule. This offers investors the ability to earn rewards while maintaining flexibility in their investments.
Reduced Impermanent Loss: By using the OVL mechanism, the vAMM mitigates impermanent loss by ensuring that liquidity providers cannot withdraw their assets at any time. This provides a more stable market for traders and reduces the risk for investors.
Increased Liquidity: The vAMM incentivizes investors to provide liquidity by offering attractive rewards on vesting schedules, leading to an increase in liquidity for the trading pair. This results in lower slippage and better prices for traders.
Lower Fees: The vAMM can offer lower fees for trading compared to other AMMs. This makes it more attractive for traders and could potentially drive more trading volume to the platform.
Trading Fee Redistribution: The protocol can choose to redistribute a portion of the trading fees collected on the vAMM to the investors providing liquidity, incentivizing them to continue providing liquidity and earning rewards on their investments.
Protocol Token Buybacks: The protocol can use a portion of the trading fees collected to buy back its native token, further increasing the demand for the token and potentially increasing its price.
How it Works:
To use the vAMM, investors need to deposit the paired asset chosen by the protocol into the vAMM and receive locked LP tokens on a vesting schedule, single-sided rewards (which may also be locked on vesting schedules), or a combination of LP tokens and single-sided rewards. The protocol deposits its native tokens into the vAMM, which are used as the other side of the trading pair.
ERC-95 tokens could be added to the vAMM pool, allowing users to trade those tokens against other assets in the CORE ecosystem. The vAMM could also provide an additional price discovery mechanism for ERC-95 tokens, which would help to further establish the CORE ecosystem as a reliable source of price information.
Overall, the vAMM provides an innovative solution to the liquidity problem faced by the DeFi space. By leveraging the power of OVL and the cVault Finance Ecosystem, the vAMM could become a leading decentralized exchange in the DeFi space. Its features and benefits, including customizable vesting schedules, reduced impermanent loss, increased liquidity, lower fees, trading fee redistribution, and protocol token buybacks, make it an attractive option for both liquidity providers and traders. The creation of the vAMM within the cVault Finance Ecosystem can increase the overall liquidity of the ecosystem, benefiting the entire ecosystem as a whole.
PastaSauce March 13, 2023, 11:54pm2
You are tireless in your work on this project. Greatly appreciated.