Ref. V2 – Unlock concentrated liquidity for better capital efficiency | by Ref Finance

Efficient swap fee income and fewer temporary losses.

introduction

The launch of AMM with concentrated liquidity is a success for Ref Finance and de facto for the NEAR ecosystem. What is concentrated liquidity? This is the liquidity allocated within a user-defined price range. Using the mechanisms of concentrated liquidity, liquidity providers (LPs) can accumulate capital with smaller price intervals than (0, ∞), thus enabling individualized price curves. This could potentially increase capital efficiency for traders by 4000x.

Ref Finance is always looking for ways to add value to users in terms of their liquidity. With this in mind, the launch of concentrated liquidity on Ref is an incremental new key feature for the NEAR ecosystem in the Rust environment, brought to you in collaboration with Izumi Finance and Arctic.

Key Features – The functional difference between V2 and V1

• Liquidity providers can now arrange liquidity in one area, with efficient returns on swap fees and fewer transient losses.
• Limit order as one-way liquidity provides a CEX order book style user experience;
• As liquidity has increased significantly around the current price, swap slippage has decreased significantly.

Key Features – The functional difference between Ref V2 and Uniswap V3

• Using the constant sum formula for small price range fragments instead of the constant production formula results in a notable improvement in support of limit orders.
• Users can place limit buy orders at a price above the current price or sell orders at a price lower than the current price. Ref V2 would automatically match the best price first, similar to CLOBs (Central Limit Order Books) found on centralized exchanges.
• Since it is a type of one-way liquidity, there is no need to keep track of the progress of the Ref V2 limit order deal. Users can claim their order earnings at any time without fear of the token earned being refunded.
• Improved Fee Structure: Only takers or market makers pay a fee for an open order. Thus, only LPs (and the protocol itself) can benefit from swap fees.

All this means that the concentrated liquidity model gives you two options:

1. Providing liquidity across the range to spread your wealth more thinly, with lower returns but less risk of falling outside the range;
2. To narrow your offering according to market conditions to increase capital efficiency and earn more fees.

As mentioned above, we compared our development capabilities of this model to Uniswap’s model, from Ethereum to NEAR, but far more cost-effective. Ref V2 offers a more capital-efficient, user-friendly experience with dynamic pricing, reduced fees, and cross-chain integrations.

Test

Smart contract security is a top priority for a DeFi protocol, For this reason, the core contract codebase is currently under review by BlockSec and bug bounties will be listed on Immunify as mainnet launch approaches.

test season

Last but not least test it on testnet -> https://testnet.ref-finance.com/

3 concentrated liquidity pools are currently being created:

1. USDT Near 0.2% Fee: 6000 USDT – 1100 NEAR, 5.2 USDT/Near
2. Ref USDT 0.2% Fee: 30,000 Ref – 19,000 USDT, 0.5 USDT/Ref
3. usn-usdt-0.01% fee: 20,000 – 20,000, 1 USDT/USN

Or you can create your own liquidity at:
https://testnet.ref-finance.com/addLiquidityV3

Feel free to contact us

If you are a DEX market maker or have experience with DEX market making or just have questions about Ref Finance or want to partner with us, we can be reached at [email protected], our Telegram and Discord. Don’t miss us at NEARCON 2022.

Your DEX, your wealth, your liquidity.

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