CarbonDefi.xyz is a decentralized trading protocol that offers users the ability to customize their liquidity strategies within the blockchain ecosystem. This is made possible through two unique methods: on-chain limit orders and range orders.
During the EthCC Paris event, Dr. Mark Richardson, CEO of CarbonDefi.xyz, discussed how the project is transforming the world of automated market makers (AMMs) in the Web3 space. He explained that the platform’s new features will introduce a groundbreaking concept in the AMM sector, challenging traditional liquidity design and utilization in decentralized finance (DeFi).
AMMs are algorithms that enable automated trading of cryptocurrencies and tokens without relying on traditional order books. They operate within the Web3 ecosystem on the blockchain. Traditionally, AMMs have utilized constant product formulas to determine token pricing relative to each other.
CarbonDefi.xyz, however, introduces “Asymmetric Liquidity” as a disruptive breakthrough. Unlike previous AMMs, where token prices are dependent on the balance of another token, CarbonDefi.xyz allows tokens to be priced based on their own balance. This shift offers significant potential and addresses long-standing issues in the AMM sector, such as vulnerability to sandwich attacks.
The platform also introduces a dynamic pricing structure, allowing traders to define their own price ranges for token buying and selling. This is a departure from the conventional model governed by AMM protocols. Traders can establish precise price boundaries tailored to their preferences, reducing the risk of impermanent loss.
Another noteworthy addition is the introduction of “Connected Liquidity Orders,” similar to grid trading. Users can seamlessly sell one token within a specific price range and reinvest the proceeds to purchase the same token when prices dip. This mechanism, known as “rotating liquidity orders,” provides flexibility for traders.
The CEO conducted a comprehensive comparison between CarbonDefi.xyz’s asymmetric liquidity and other prominent models such as Uniswap V2’s constant product formula and Uniswap V3’s concentrated liquidity. Simulation outcomes demonstrated that CarbonDefi.xyz’s approach yielded higher returns with reduced risk exposure.
Dr. Richardson emphasized the significance of collaboration with experts, the project’s gas efficiency, and real-world use cases like trading competitions in driving improvements to the platform.
In conclusion, CarbonDefi.xyz is pushing the boundaries of AMMs in the DeFi space with its innovative features and unique liquidity strategies.