Overview
The IF Swap builds on Uniswap V2 by adding functionality to artificially inflate the total value locked (TVL) for pools with stablecoins. Doing this reduces trade slippage, allowing users to get a better price. Meanwhile, it also allows LPs capital to be used more efficiently, and in turn nets them more LP rewards.
Impossible Finance achieves this through a novel invariant we term "xybk invariant" that introduces a boost variable, b. Basically, the tuneable boost variable sets the artificial pool TVL at a multiple of the real pool TVL. For instance, a xybk pair pool with 100 of each token with a boost of 10 would behave *exactly* like a uniswap V2 pool with 1000 of both tokens.
We also introduce a novel concept of "asymmetrical tuning" to the AMM swap space. Asymmetrical tuning allows the Impossible Swap ecosystem to support tokens with asymmetrical risks better than other swap designs. For instance, a new algo stablecoin project might have super-strong economics for restoring pegs when trading above $1. In this case, we would set a higher capital efficiencies the stable is priced above $1 while maintaining a regular uniswap curve when prices break below $1.
Last modified 4mo ago
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