Concentrated Liquidity – BaseX as a Uniswap V3 fork

BaseX will be taking the ve(3,3) DEX model similar to what we have with the success from Thena’s FUSION, we will be utilizing UniswapV3's concentrated liquidity design (instead of algebra DEX) in conjunction with the original solidly model and Gamma strategies. Through these efforts, we boost capital efficiency and greatly enrich the user experience in the DeFi ecosystem. This collaborative endeavor amalgamates the proficiency and advantages of various projects, crafting a potent and smooth solution for both users and liquidity providers.

As most DeFi participants know, most Solidly forks adopt UniV2 pools. Liquidity is distributed evenly across all price ranges (0, +∞), leading to similar rewards for both idle and active liquidity during user transactions. However, this model falls short in capital efficiency, as DEX utility tokens used for renting liquidity might not successfully equal trading fees earned from DEX transactions, resulting in an ever-falling DEX native tokens.

This brings us to concentrated liquidity pools, where LPs can place their liquidity within specific price bands and generate trading fees when the current price falls into their selected band. This method is reminiscent of an order book, leading to a concentrated liquidity distribution around the market price of the token pair.

From the LP provider point of view, concentrated liquidity offers improved price execution compared to UniV2 pools for any given amount of TVL. It also rewards LPs’ funds efficiently, thus creating a promising alternative for liquidity providers and users seeking optimized trading experiences. Concentrated liquidity pools offer a more effective and flexible solution to the challenges experienced in traditional UniV2 pools, benefiting both LPs and traders.

As BaseX works jointly with Gamma Strategies, it brings groundbreaking changes to CL management, capital utilization, and user experience. The platform tackles CL challenges by simplifying complexities, reducing the risk of impermanent loss, adapting to market fluctuations. It offers six LP strategies designed to cater to various assets and user preferences. (wide, narrow, manual, pegged price, correlated, stable ranges)

Adoption of UniV3 with ve(3,3) has numerous benefits including a versatile design, cost-effective solutions for traders and protocols, an intuitive user interface, market making opportunities. Utilizing the automated CL strategies, in partnership with Gamma Strategies, creates an easy way for liquidity providers to earn more.