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Common questions are answered here, for more discussion message on Discord

What is Single-Sided Liquidity?

  • Single-sided liquidity is a revolutionary AMM that allows you to deposit a single asset to earn auto-compounded yield. The yield is derived from the arbitrage profit from the spread between the quoted oracle and pool price and the swap fee. We use a proprietary advanced market making algorithm we developed and tested for several months. This math logic gives us a superior edge in quoting for best prices and therefore generating substantial fees on swaps along with arbitrage. Due to this, we are also capital efficient and thus can outperform other AMMs. All fees and volume are done on chain and can be verified if there are any doubts. APY can change with the amount of users/liquidity in the pools. It is ratio based as well as a proponent of fees generated which are split amongst pool participants.

What is the difference between stable, primary, and hyper pools?

  • The distinction between stable, primary, and hyper pools lies in the types of assets they hold. Stable pools are composed of stablecoins, primary pools house prevalent ecosystem tokens, while hyper pools cater to more volatile assets.

What are the risks?

  • The risks associated with single-sided liquidity are price inventory risk which is common for any market maker. This risk occurs when the price of the assets used for market making declines in value in excess of the fees generated. The SSL system is designed to not have impermanent loss. However, with our new type of single sided liquidity automated market maker there is risk that we call "Token Exposure Risk". Before we explain what Token Exposure Risk is, let's define some terminology. Main Pool Token : The main pool token of a pool is the token that is deposited into the pool by liquidity providers. For e.g. the main pool token of a SOL pool is SOL. Secondary Token : A secondary token is any token that is not the main pool token for a pool. An example: For the SOL pool, BONK is a secondary token. And for the BONK pool, SOL is a secondary token. Token Exposure Risk is defined as a pools exposure to secondary tokens. For example, let's say that a user interacts with a SSL SOL pool by swapping her BONK into SOL. Until the SOL pool has gotten rid of the BONK tokens either by making another swap, the value of the SOL pool will experience change depending on the movement in BONKs price. If BONK goes up in value as compared to SOL, then the pool value will increase, while if BONK goes down in value as compared to SOL, then the SOL pool will experience a value decrease. Even if token exposure risk can result in a value increase of the pool, our purpose is profitable market making and not speculation on price movements. Therefore, rules and thresholds are in place to control the amount of token exposure risk our pools are exposed to in order to maximize the exposure to market making profits.

How are LP fees distributed?

  • 50% of fees are sent directly to LPs in the native asset of the token pool. The rest of the fee distribution details can be found in our Fee Share docs.

How is APY calculated for SSL Pools?

  • APY is calculated based on the swap fees generated by the liquidity pools. The APY provides an indication of the potential returns that LPs might earn over a year from profit/loss of marketing making and arbitrage. It is calculated on a weekly basis and then annualized. The SSL system is designed so that impermanent loss doesn't occur, but because of the occasional exposure that the single-sided pools get due to trading, there is some risk. We control the token exposure risk using thresholds and by updating the prices we quote in order to balance the trade-off between profitable market-making and holding inventory.

Are the SSL Yields Incentivized?

  • No. The yield generated by our single-sided liquidity pools is composed of the swap fee as well as the profit and loss from market-making activities.

Are there controls in the program that prevent the MM strategy from withdrawing more than a certain amount from the pools to float?

  • Yes, there is a max drawdown per pool and this value is dependent on the volatility of the asset where it will be lower for stables and have a higher tolerance for volatile assets.

Bob and Alice Numerical Example

Initial Setup
  1. 1.
    Bob: Starts with $1000, wants to buy SOL.
  2. 2.
    Alice: Has deposited in an SSL pool and will earn fees from transactions.
  3. 3.
    Swap Fee: Set at 0.1%. Transaction Details
Transaction Details
  1. 1.
    Bob's Action:
    • Wants to buy SOL with his $1000.
    • GooseFX offers the best swap rate at $50/SOL. The market rate (oracle price) is $50/SOL, and the SSL pool rate is $49.98/SOL.
  2. 2.
    Bob's SOL Purchase:
    • Buys SOL at $50 per SOL.
    • Total SOL bought = 1000/50 = 20 SOL.
    • Swap fee = 0.1% of $1000 = $1.
  3. 3.
    Bob's Final Balance:
    • Ends up with 20 SOL.
  4. 4.
    Earnings for Alice (LP):
    • From the swap: Swap fee = $1.
    • From the price difference: Profit per SOL = $0.02 (since Bob bought at $50/SOL while pool price was $49.98/SOL).
    • Total profit from price difference = 20 * 0.02 = $0.40
    • Total earnings = Swap fee + Price difference profit = $1 + $0.40 = $1.40. Final Balances and Earnings
Final Balance and Earnings
  1. 1.
    • Started with $1000.
    • Ended with 20 SOL.
    • Successfully swapped his USDC for SOL at a competitive rate.
  2. 2.
    Alice (Liquidity Provider):
    • Earned a total of $1.40 from Bob's transaction.
    • This amount is added to her assets in the SSL pool.