Logic

AMM Overview

Each NFT pair on our AMM has a corresponding liquidity pool comprising the collateral (WETH) and the traded pair (i.e. BAYC). Our AMMs use an innovative form of range compression that compresses the x*y=k curve into an upper and lower range. This approach is more capital-efficient than Uniswap V2 AMM and performs slightly better than a single compressed Uni V3 AMM.

nftperp AMM

A range-concentrated AMM concentrates the AMM between a lower bound α and an upper bound β. However, Prices are volatile. An asset trading at 1 ETH today can reach 100 ETH someday and vice versa. Thus, finding an α and β that adapts to the price volatility without losing the power of concentrated math is impossible.

To solve this problem and provide better options to the Liquidity Providers, we have created a concept called AMM Pools. Each pair has multiple AMMs called a pool. For a pool n belonging to an NFT, its lower bound equals the upper bound of the previous pool, and its upper bound is R percentage larger than its lower bound. For most pairs, R is instantiated between 3-6% -- a range very popular among Uniswap V3 LPs.

Pool Example