Fusion

GAMMA Fusion - Optimizing Unused Capital in Liquidity Pools

GAMMA Fusion is an enhancement for GooseFX's GAMMA, designed to optimize liquidity utilization by deploying unused capital into external yield-generating platforms.

Learn about AMMs

GAMMA Fusion

1. Dynamic Liquidity Allocation

   • A portion of unused capital from pools will be deployed into external protocols like Kamino Finance, Drift, Marginfi to earn yield.

   • Blue-chip and primary token pairs (SOL-USDC) will be prioritized due to their stable price movements.

   • A maximum of 15% of TVL can be deployed to external protocols.

2. Rebalancing Mechanism

   • Regular rebalancing to withdraw or deposit liquidity based on market volatility and pool utilization.

   • Rebalancing occurs every 15 minutes, with the flexibility to be adjusted as needed.

3. Integration with External Protocols

   • Liquidity will be allocated to external lending/borrowing platforms or concentrated liquidity pools based on TVL thresholds. Trusted platforms like Kamino Finance, Drift, Marginfi and others.

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Pool State Modifications

• A new variable, max_shared_liquidity, will determine the proportion of liquidity deployable to external protocols.

New Instructions

• Rebalance Pool: Automatically adjusts liquidity to stay within the max_shared_liquidity threshold.

• Deposit Shared Liquidity: Allocates unused liquidity to external platforms.

• Withdraw External Deposits: Reclaims liquidity from external platforms for pool needs.

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Risk Mitigation

1. Smart Contract Risks: Full audits of new functionalities.

2. Liquidity Constraints: Ensure external platforms have no lock-in periods, avoiding liquidity shortages during high trade volumes.

3. Operational Risks: Implement fallback mechanisms to withdraw liquidity during protocol downtimes.

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FAQs

• Does Fusion affect swap fees or slippage? No, swap fees and slippage remain the same. Fusion optimizes idle capital to maximize yields.

• Can I create permissionless fusion pools? Yes, users can create permissionless pools, but Fusion is only added to select blue-chip pools chosen by the GooseFX team.

• Are there risks to my deposited liquidity with Fusion? Yes, there is a small risk from external platforms’ smart contracts, where Fusion deploys idle capital.

• How does Fusion impact my LP earnings? Fusion boosts pool yields by using idle capital in external lending protocols.

• What percentage of liquidity is deployed externally? A maximum of 15% of TVL can be deployed to external protocols.

• Will my LP tokens or positions change? No, Fusion does not alter your LP tokens or positions.

• Can I withdraw 100% of my liquidity with Fusion active? Yes, you can withdraw your entire LP position at any time.

• Are there lock-in periods for external liquidity? No, there are no lock-in periods for liquidity deployed externally.

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