Weighted Pools
Last updated
Last updated
Integrating the sophisticated weighted pools AMM mechanism inspired by , ChefSwap offers a flexible and efficient way for trading and liquidity management on Solana. This innovative approach allows for the creation of liquidity pools with variable asset weights, unlocking new strategies for liquidity providers and traders.
The weighted pools allow for the creation of liquidity pools with multiple tokens, each assigned a specific weight in the pool. These weights determine the value ratio of the tokens in the pool, enabling custom trading strategies and risk diversification. This flexibility contrasts with traditional AMM models that typically require assets to be deposited in equal-value ratios.
Exposure Control: Users can tailor their exposure to specific assets while providing liquidity, minimizing impermanent loss during price fluctuations.
Impermanent Loss Mitigation: Weighted pools, especially those with asymmetric allocations like 80/20, help mitigate impermanent loss while balancing liquidity and slippage.
Flexibility and Personalisation: Pool creators have complete control over the weights of assets, offering limitless possibilities beyond traditional 50/50 splits, such as 80/20 or multi-asset index funds.Through personalised liquidity pools, they can earn additional yield on their portfolio allocation.