One of the biggest issues with liquidity providers is the risk of impermanent loss. It happens when you provide liquidity to an AMM pool, and the price of your deposited assets changes compared to when you deposited them. The bigger this change is, the more you are exposed to impermanent loss. In this case, the loss means less dollar value at the time of withdrawal than at the time of deposit.
There is another issue with the AMM which is the price slippage. It's the difference between your intended price and where your trade is executed. This problem becomes more severe when you want to swap between stablecoins because their price is meant to be stable.
It’s required to provide enormous funds to keep a meaningful liquidity for a stablecoin pool. On the other hand, the returns will be very small perhaps several percent APY. This leads to another issue of capital efficiency where a pool with smaller TVL can provide better liquidity (lower slippage) and gain more returns for LPs. In relation to this capital optimization, most AMMs only offer a fixed fee model regardless of the market volatility.
Looking at all the aforementioned concerns, Bunicorn made an effort to combine the best solutions of existing AMM platforms into a single seamless UI that addresses all of the problems above with following features:
- Flexible AMM pools with a customizable number of assets and weights within a pool. It mitigates the risk of impermanent loss when exposing half of your portfolio to a high volatile token in traditional 50:50 pools.
- Amplified pools that allow swapping between stablecoins with lower slippage and higher capital efficiency.
- Smart order routing that automatically splits your swap across several pools for optimized price.
- Dynamic fees adjusted based on the underlying volatility to maximize returns for liquidity providers and encourage trading volume in a sideway market.
- No third-party or centralized oracle risks.
- Liquidity providers can also join multi-token pools with a single asset.
There are many types of users that can benefit from our platform:
- Liquidity providers who have cryptocurrencies sitting idle in their wallet and would like to earn passive income from swapping fee and liquidity mining.
- Token teams to list their newly issued token in an alternative DEX on BSC. Especially, they can customize the weight of their pool for example 60% Token, 40% BNB.
- Retail users who want to swap tokens with low slippage and good price.
- Whales who want to convert their stablecoin from one to another, or want to make the best profit out of their large stablecoin portfolio.
- Arbitrageurs who exploit market inefficiencies between exchanges to earn profit.
- Other Dei products seek liquidity through smart contracts ABI.