Sushiswap launches the next-generation AMM mechanism Trident, which will support four types of liquidity pools
Now is the early stage of this movement, and it is a good time to get involved.This article is from the Sushiswap blog and is organized by Chain Catcher.
Today, the leading DEX project Sushiswap officially released the next-generation AMM mechanism Trident on its official blog to enhance capital utilization efficiency and volatility protection capabilities.
According to the blog content, Trident is built on BentoBox and features support for four types of liquidity pools, including constant product pools, hybrid pools, concentrated liquidity pools, and weighted pools, to alleviate the pain points users face due to liquidity isolation, allowing users to choose the liquidity pool that best suits their risk profile and more refined cryptocurrency management methods.
Among them, the constant product pool is the mechanism used by most DEXs in the past and currently by Sushiswap, consisting of two assets with equal monetary value, following the formula x*y=k;
The hybrid pool allows users to influence the exchange of similar assets at a lower price. In the hybrid pool, users can include up to 32 assets in one pool. Based on stable exchange curves, this allows similar assets to trade with each other in a single pool without interference from other market factors or significantly different tokens. Liquidity providers using this type of pool will receive NFTs instead of ERC20 LP tokens;
The concentrated liquidity pool is similar to the mechanism of Uniswap V3, requiring users to specify a price range for the token assets to increase liquidity while maximizing fee income.
The weighted pool will be similar to the constant product pool, with the difference being that this pool allows different weight types, breaking the limitation of needing a 1:1 value match between the two assets in a trading pair, as is the case with constant product pools. At the same time, the weighted pool can support up to 8 tokens simultaneously.
The weighted pool also allows liquidity providers to specify the percentage of each asset in the trading pair, no longer limited to 50%-50%, as long as they add up to 100%. The advantage of this type of pool is that it transfers price impact through token weights.
In addition, Trident also includes a new routing engine for the frontend, Tines, which supports searching for prices across multiple types of liquidity pools, supports multi-path horizontal distribution of trades, and takes into account factors such as gas costs and price impact to generate the best price solutions.
Sushiswap stated that Trident will be launched in the coming weeks, with several important upgrades to follow, such as the introduction of franchise liquidity pools that allow institutions to whitelist liquidity providers and traders.
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