Impossible Finance Unveils Cheaper, More Effecient Swap Design V2
Zug, Switzerland, 17th June, 2021,
Impossible Finance, a comprehensive DeFi incubator, launchpad and swap platform, has unveiled its V2 decentralized exchange design, featuring the lowest price slippage and maximized capital utilization.
Through an optimized mathematical model, liquidity providers of Impossible Finance’s swap enjoy several extra benefits. This includes lower swapping fees and better passive portfolio management thanks to the protocol’s ability to precisely manage risk/reward based on market conditions.
1. Better capital efficiency
For users of swaps, the V2 design introduced new features and optimizations, including very competitive slippage rates and swap fees, setting the stage for exponential growth in Automated Market Maker adoption.
For this purpose, Impossible Finance uses a novel bonding curve that we term “xybk invariant,” whereas b = boost, an adjustable multiplier during protocol operation. This helps allow the pools to provide higher liquidity than other pools with greater Total Value Locked (TVL).
Another feature the new swap offers is called ‘asymmetrical tuning.’ This deals with one of the key hypotheses of building a stablecoin-customized AMM — the ability to provide different capital efficiencies for each side of the invariant curve.
The easiest way to visualize this is that centralized order books have asymmetric depth charts, so why should AMMs be a perfect parabola?
The asymmetrical tuning is built for providing an ideal quotation between stablecoins swap under AMM mechanism. It’s extremely useful for stablecoins with strong economics on 1 side of the peg (such as algorithmic stablecoins or Tether), as the stablecoin typically should stay close to the value of a dollar.
To come up with an ideal formula, we might choose to provide 1000x capital efficiency when the peg breaks downwards and 50x capital efficiency when peg breaks upwards. Therefore, the asymmetrical tuning tailors the most optimal balance between reward and impermanent loss for LPs.
This feature is provided by using two piecewise continuous xybk invariant curves joined at the midpoint, token0Balance = token1Balance = sqrtK:
2. Better gas efficiency
Even with these groundbreaking design improvements, transaction costs on Impossible Finance v2 are actually affordable for most users.
To put our improvements into perspective, the swap implementation of the xybk invariant provides swaps as efficient as curve.finance based swaps + cheaper than uniswap v3 based swaps.
Overall, these features make Impossible Finance v2 one the most flexible and efficient AMM ever designed for liquidity providers and traders. LPs can provide liquidity with up to 4000x capital efficiency, earning higher returns on their capital.
It’s difficult to make precise capital efficiency comparisons with v3 uniswap as Uniswap LPs can choose their own capital efficiencies by choosing the LP over some price range. However, our more passive, easy-to-use design can achieve high capital efficiency with high boost factors.
Capital efficiency paves the way for low-slippage trade execution that can surpass both centralized exchanges and stablecoin-focused AMMs.
We’re excited to launch our swap on June 17th at 9pm SGT with:
• Audits from Zokyo and Attic Lab proving the security of our swap
• A yieldfarm for LPs for IF-BUSD and IF-WBNB pools will commence on Friday, June 18th, at 9PM SGT.
Impossible Finance now serves as critical infrastructure for decentralized finance, empowering developers, traders, and liquidity providers to participate in a secure and robust DeFi marketplace.
The recent milestones come on the heels of Impossible Finance’s fresh capital injection led by a bevy of high-profile institutional and angel investors. Earlier this month, the company raised $7 million via a seed funding round with participation from over 125 notable investors including True Ventures, CMS Holdings, Alameda Research and Hashed.
The new financing will help Impossible Finance in building a multi-chain ecosystem for promoting growth of DeFi liquidity and composability. Starting on Binance Smart Chain, Impossible Finance has plans to go multi-chain by expanding onto Ethereum and Polygon, with more deployments scheduled on future L2 solutions and other platforms.
About Impossible Finance
Impossible Finance is a multi-chain incubator, launchpad, and swap platform. Built by DeFi veterans from Binance & other top fintech firms, Impossible offers a robust product-first ecosystem that supports and launches top-tier blockchain projects to targeted user audiences.
Impossible also offers an AMM liquidity protocol which acts as the backbone of the ecosystem that features a fully decentralized incubator and launchpad for new projects in DeFi.
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