What is Liquidswap (LSD)?

What is Liquidswap (LSD)?

Liquidswap (LSD) is the first-ever Automated Market Maker (AMM) on the Aptos blockchain. It offers a robust and decentralised platform for token swaps by leveraging the innovative Move programming language to ensure security and efficiency. Liquidswap stands out with advanced features like concentrated liquidity, dynamic fee structures, and a unique liquidity book model to revolutionise the decentralised finance (DeFi) landscape on Aptos.

Who Created Liquidswap (LSD)?

Liquidswap (LSD) was created by Pontem Network, a product studio known for building foundational decentralised applications (dApps) on the Aptos blockchain. Pontem Network is renowned for its innovative use of the Move programming language, which is specifically designed for the Aptos ecosystem for enhanced security and efficiency. The team behind Pontem Network has extensive expertise in developing advanced blockchain solutions and has been instrumental in bringing the first Automated Market Maker (AMM) to the Aptos blockchain. Supported by leading investors such as Animoca Brands and Mechanic Capital, Pontem Network continues to push the boundaries of what is possible in the DeFi space.

How Liquidswap (LSD) Works

Concentrated Liquidity

Liquidswap employs a system where liquidity is divided into 'bins,' each representing a specific price range. This model significantly enhances capital efficiency by allowing liquidity providers to concentrate their assets in bins where they expect trading to occur. By doing so, it minimises slippage, ensures that trades can be executed at precise prices, and maximises the use of liquidity for both providers and traders.

Liquidity Book Model

This model allows users to specify exact prices for buying or selling assets, similar to placing limit orders on a traditional exchange. Each bin functions as a mini-pool within the larger pool, and liquidity providers can choose to place their liquidity in bins corresponding to specific price points. This offers a high level of control over liquidity positions for more strategic trading and liquidity provision.

Dynamic Fee Structure

Liquidswap adapts its fees based on the volatility of each trading pair. In periods of high volatility, fees increase to compensate liquidity providers for the higher risk of impermanent loss. Conversely, during stable periods, fees decrease to make trading more cost-effective. This dynamic approach aligns with market conditions so that fair compensation can be guaranteed for liquidity providers while competitive trading fees are effectively monitored.

Unified Curve Approach

Unlike traditional AMMs that use different curves for stable and uncorrelated asset pairs, Liquidswap V1 employs a unified curve model. This means stable pairs operate efficiently with smaller bin steps, while more volatile pairs use larger steps, all within a single framework. This simplification reduces complexity for users and enhances the overall efficiency of liquidity provision.

High-Speed Transactions

By leveraging Aptos' parallel transaction execution engine, Liquidswap can handle a large volume of transactions simultaneously. This results in exceptionally high transaction speeds, with the capability to process thousands of transactions per second. Such efficiency is crucial in the fast-paced world of cryptocurrency trading, where delays can lead to missed opportunities or unfavourable price changes.

The LSD Token

The Liquidswap DAO token (LSD) is central to the protocol's governance and utility framework. It enables community-driven decision-making by allowing token holders to vote on key protocol parameters, such as fee structures, liquidity incentives, and future development initiatives. LSD tokens can be staked in a voting escrow (ve) model, where the amount of voting power is proportional to the number of tokens staked and the duration of the lock-up period. This incentivises long-term commitment and active participation in governance, ensuring that the community has a direct say in the protocol's evolution and sustainability. Additionally, staked LSD tokens can earn rewards, further aligning the interests of the users with the health and growth of the protocol.

LSD Goes Live on Bitget

Liquidswap (LSD) is the first Automated Market Maker (AMM) on the Aptos blockchain, designed by Pontem Network to offer unparalleled efficiency and security in decentralised token swaps. Join the revolution in DeFi by participating in Liquidswap’s governance and earning through its LSD tokens!

How to Trade LSD on Bitget

Listing time: July 30, 2024

Step 1: Go to LSD/USDT page

Step 2: Enter the amount and the type of order, then click Buy/Sell

Trade LSD on Bitget now!

Disclaimer: The opinions expressed in this article are for informational purposes only. This article does not constitute an endorsement of any of the products and services discussed or investment, financial, or trading advice. Qualified professionals should be consulted prior to making financial decisions.