🔶Fees mechanism

LIQUIFY employs two distinct price curves, Uniswap v2 and Curve Stable Swap, with the latter being better suited for trading correlated assets like USDC-USDT. This allows for higher trading volumes and reduced slippage. Trading fees for volatile assets on LIQUIFY are set at 0.4%, while stable assets have a fee of 0.02%.

Fees generated from trading on LIQUIFY are distributed to voters over a 7-day period at the start of the next epoch. These fees are proportionally allocated to veLIQUIFY users who voted for their preferred gauge. If a protocol decides to bribe a pool, veLIQUIFY holders who voted for that pool will also proportionally share the entire bribe.

Stable Pools

Stable pools cater to assets with minimal price fluctuations, making them ideal for stable pairs. This allows traders to execute trades with low slippage and optimal rates, even with large trading volumes. The formula for stable pools is as follows:

x³y + y³x ≥ k

Variable pools

Variable pools are designed for assets with high price volatility. These pools utilize a generic AMM formula commonly found in DEXs like Uniswap or Sushiswap. The formula for variable pools is as follows:

x × y ≥ k