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 ฮฑ and an upper bound ฮฒ. However, Prices are volatile. An asset trading at 1 ETH today can reach 100 ETH someday and vice versa. Thus, finding an ฮฑ and ฮฒ 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
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