Mercurial has collaborated with Serum to launch a stable-swap optimized AMM on mainnet beta. Majority of the liquidity deposited (90% to 100%) within this Serum market making pool (USDT-USDC) will be translated into limit orders on Serum’s order book.
This is an extremely exciting development for a couple of reasons.
Firstly, this is the very first implementation of a Serum MM pool that utilizes the stable swap invariant. Compared to other DEXs that offer the same USDT-USDC trades via constant-product invariant, our implementation will significantly lower slippage for stable swap trades. Eventually, the stable swap invariant can be used to kickstart new liquidity pools for tokens that are near stable representation of each other, such as different variants of SOL, BTC and ETH.
Secondly, unlike other DEXs that push a small portion (<10%) of their liquidity to Serum, our Serum MM pool translates the majority (>90%) of the pooled liquidity into limit orders on the Serum order book. The translated limit orders are also fully transparent and can be viewed on our website at all times.
Lastly, the UX for providing liquidity is seamless. Try it out yourself and let us know of any feedback!
How it works:
The AMM will monitor the Serum vault to check for updated balances. Once an update is detected, a crank transaction will be submitted to the Vault to trigger MM on Serum:
- Check all open_ask_orders and open_bid_orders in Serum to recalculate updated vault’s balances
- Cancel all open orders in Serum market
- Settle fund to withdraw all balances to vault_accounts
- Submit new orders to Serum based on deserialize methods (described below)
Deserializing an AMM to Orderbook:
Liquidity from the pool will be posted as orders based on fibonacci numbers.
order_ratio = 10 bps, USDT balance = 10k
ask order sizes: 10, 10, 20, 30, 50, … (USDT), same for bid sizes
We will utilize the stable_swap invariant to calculate the correct price in each order.
Request for LM incentives on the pool:
We would like to request for an initial 100k SRM LM grant for this pool, to be distributed over a period of 3 months - further LM grants will be requested (if required) based on the performance of the pool after the 3 months bootstrap period.
We believe that having a strong LM program for the Serum MM pool (USDT-USDC) as an initial bootstrap mechanism will, in the long run, cement Serum’s position as the go-to DEX for all stable swaps. As long as the liquidity remains healthy, the stable swap invariant will naturally outcompete other swapping algorithms, making it the best place for stable swaps to happen. In the long run, LM incentives can be reduced as swap fees on the pool will be sufficient to retain liquidity.
Happy to discuss further if there are any questions - we hope to get the support of SRM holders to push this through!