Introduction

Introduction

Liquidity Book is a novel, highly-capital efficient Automated Market Maker (AMM) protocol. Its features include:

  • Zero Slippage: Traders can swap tokens with zero slippage within bins.

  • Surge Pricing: Liquidity Providers earn additional dynamic fees during high market volatility.

  • High Capital Efficiency: Liquidity Book can support high volume trading with low liquidity requirements.

  • Flexible Liquidity: Liquidity Providers can build flexible liquidity distributions according to their strategy.

Liquidity Book vs Uniswap V3

Both Liquidity Book and Uniswap V3 are concentrated liquidity AMMs with some subtle differences:

  • Price ranges are discretized into bins instead of ticks

  • Bins use constant sum invariant instead of constant product

  • Bin steps (or tick sizes) can be more than 1 basis point

  • Liquidity is aggregated vertically instead of horizontally

  • Liquidity positions are fungible

  • Liquidity positions are not restricted to uniform distribution across its price range; they can be distributed in any shape desired

  • Swap fees have fixed + variable pricing, which allows the AMM to charge more fees when the market experiences high volatility.

NextLB V2.2 Key Changes

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