Introducing: Liquidity Book V2.1
A New Era of DeFi Yield Farming
TLDR:
Autopools: Automated strategy execution layer for Liquidity Book
Autopool Receipts: Deposit and collect rewards, yield farming we all love
sJOE: Stake into sJOE and receive your share of trading activity
Permissionless Pools: Anyone can open a Liquidity Book Pool
Fees now compound: Optimising gas usage by ~30-40%
Migration to new V2.1 Liquidity Pools
Maker style limit orders (deploying at a later date)
The Next Chapter: Liquidity Book V2.1
Welcome to a new era of DeFi Yield Farming. Trader Joe builds, and everything that is coming as part of V2.1 has been built from the ground-up and bespoke for Liquidity Book’s innovative discretized liquidity architecture. Liquidity Book offers market leading levels of customisation and flexibility, but V2.1 takes a step further by democratising the ability for everyone to access the power of Liquidity Book. Expect nothing short of a market-leading experience with V2.1. Trader Joe is pioneering the future of AMMs and the role they play within DeFi ecosystems, it starts today.
All features and enhancements shared in this article are rolling out from today (6th of April) and will be progressively launched and scaled over the coming weeks.
Introducing: Autopools
Autopools add an automated liquidity strategy execution vehicle for Liquidity Book pools. Users that do not want to actively manage liquidity positions themselves, can choose to utilise an Autopool instead.
The first auto-pools will run a basic market maker strategy:
Liquidity is concentrated around the active bin when volatility is low
The spread is widened as volatility increases
Inputs: twap and volatility
Outputs: position and shape size
Overtime, Autopools will be expanded to include more exotic strategies that can include off-chain signals, different asset compositions and more.
Why are Autopools exciting?
Autopools strategies are executed using off-chain scripts that are controlled by a ‘Black Box’. The Black Box enables strategies to be updated in real time, this means that Autopool strategies can be dynamically updated, enabling optimisation for market conditions and allowing for a process of constant iteration to improve performance.
Autopools are in the final stages of testing, expect to hear more shortly about the launch strategies and deployment details. Autopools will equip the Trader Joe platform with a fully native ‘liquidity-as-a-service’ experience, built by our passionate team that aim to drive real innovation and sustainability into the AMM space.
One-Click Yield Farming: Autopool Farms
Deposit tokens into an Autopool and receive a token receipt that can be utilised for further DeFi activities, such as a Yield Farm, collateralisation and leverage. This is the ‘V1’ style of DeFi yield farming that many users are familiar with and this is only possible thanks to the fungible liquidity architecture of Liquidity Book.
Trader Joe is engaging with a number of partners across Arbitrum, Avalanche and BNB to work on integration of Autopool token receipts for further DeFi use-cases.
sJOE
Fees accrued in Liquidity Book pools will share a % directly to sJOE Stakers. Fee sharing will be exclusive to each chain, this means sJOE on Arbitrum will share fees on Arbitrum and sJOE on Avalanche will share fees on Avalanche. sJOE Fee share is live for all V2.1 Liquidity Pools that are now being opened on Avalanche. Expect sJOE to scale up as more migration and deployment of V2.1 pools happen.
Below is the Fee Share Rate by market grouping:
Stables 0-5%
Alt Stables / Staked 10-25%
Majors/Network Tokens 10%
Alts 15-20%
Long-Tail 25%
Please note that final fee share is subject to change and the Core Team reserve right to adjust fee shares at market level once live to ensure optimisation for all users
Permissionless Pools
Currently, Liquidity Book Pools are permissioned. However, the permissionless pools feature opens the taps for Liquidity Book Pools to be opened by anyone with an out-of-the-box configuration set at 100 bps discretisation (0.8% base fee for trading). Permissionless Pools can only be paired with whitelisted quote assets: Avalanche (AVAX, USDC, BTC.b and UTDT) and Arbitrum (ETH, USDC, USDT and BTC.b). New discretisation configurations may be added in the future.
Permissionless Pool option will go live in the coming week(s)
Governance still remains the best path for projects wanting a custom-fit market for their token. Governance proposals can be launched in the Trader Joe Discord Forum.
Fees are now compounded and no longer claimable
Liquidity Book V2.1 comes with a complete code overhaul that implements a number of key optimisations. V2.1 will vastly improve the user experience for transacting or managing liquidity on Liquidity Book by reducing the average gas cost by 30-40%. helping to further drive adoption of users and partner protocols looking to build on top of the AMM.
A key change for this optimisation, is that users are no longer able to claim the fees they accrue and instead all fees will be automatically claimed and compounded into the active bin that fees were accrued from. This type of enhancement is only possible thanks to the fungible discretized bin architecture that Liquidity Book is built on. All user fees accrued can be tracked per hour or by bin using analytics built into the Liquidity Book pool pages.
Migration to new Pools
Due to the complete code overhaul, all contracts for Liquidity Book V2.1 are entirely new and therefore Liquidity Book Pools will be migrating from the current V2 version to V2.1. This will happen in tranches, to minimize disruption across the platform. The process is as simple as withdrawing liquidity and then redepositing into a new Liquidity Pool. The main focus on migration to V2.1 pools will start with smaller Liquidity Pools on Avalanche and scale up from there across chains. We expect the migration for all chains will last a number of weeks.
All Liquidity Pools with a ‘migration’ sign will have an active V2.1 pool that can be migrated to. To understand this process step by step please view the below guide
👉 Migration to V2.1 Liquidity Pools 👈
Maker style native limit orders
Users will soon be able to set up swap instructions that execute buying or selling of a Token at desired price points for all Liquidity Book Markets. This feature will be a native build and will act as ‘Maker’ style liquidity order where the user deposits tokens into a Liquidity Book pool with an instruction to withdraw the liquidity if the desired price is met. As a Liquidity Provider, you get complete control over your provisioning strategy. Enabling you to execute swaps at your precise price target, without cost and also earning your share of fees accrued by the Pool while executing the limit order.
Limit Orders will be launching at a later date not yet announced
Security
Liquidity Book V2.1 and Autopools has been audited by our trusted partner, Paladin Security. In the ever consistent interest of securing protocols and code with multiple audits, both V2.1 code and Autopools will undergo an Audit Contest program with Immunefi, this will be commenced soon.
About Trader Joe
Trader Joe is a leading multi-chain decentralized exchange and the creator of Liquidity Book, the most efficient AMM in DeFi. Trade across hundreds of your favorite DeFi tokens, access the most powerful yield farming experience with Auto-Pools and shop for the latest digital collectibles at the Joepegs NFT Marketplace. Trader Joe makes DeFi easy.
highly informative
Great article