Bunicorn
Launch Testnet App
  • What is Bunicorn?
  • Introduction
    • AMM DEX
    • Liquidity Mining
    • NFT Collectibles
  • Getting Started
    • Wallets that Bunicorn supports
    • Get BEP20 Tokens
    • Connect your wallet
    • Bunicorn testnet 101
  • Bunicorn Exchange TUTORIAL
    • Tutorial for Trader
    • Tutorial for Liquidity Provider
      • Setup Proxy
      • Swap native BNB to WBNB to farm
      • How to Add Liquidity on Bunicorn
        • How to add liquidity to a Flexible pool?
        • How to add liquidity to a Stable Pool?
      • How to create a new Flexible pool?
        • How to Create a New Smart Pool
        • How to Create a New Shared Pool
      • How to Remove Liquidity
    • How to Join Token Play Farms
      • Stake LPs to Token Play Farm
      • Stake Single Asset $TOP
    • How to Join Ancient Buni NFT Farms
      • NFT Farm Ends. What should I do?
      • Stake LPs to Join the Ancient Buni Farm
      • Stake Single Asset
      • Harvest NFTs (Ancient Buni)
      • How to transfer Ancient BUNI NFTs to another address?
    • How to Join Bunicorn NFT Farms
      • Prestaking Farm Ends. What's next?
      • Stake LP to Join NFT Farms
      • Stake Single Asset
      • Harvest NFTs (Chest/Egg)
      • How to unlock ingame items from Chest/Egg NFTs
      • How to Transfer Egg/Chest NFTs to another address
    • Fee Structure
  • FAQ
    • What is a Flexible Pool?
    • What is a Stable Pool?
    • Can users create Stable pools themselves?
    • Are there any constraints for setting up a Bunicorn Flexible pool?
    • What are the advantages of a Stable Pool?
  • Glossary
  • SMART CONTRACTS
    • Flexible Pools
      • Exchange Proxy
      • Smart Order Router
      • On Chain Registry
      • Smart Pools
        • Overview
        • Configurable Rights Pool
        • Component Libraries
          • Rights Manager
      • Interfaces
      • Addresses
      • Events
      • API Index
    • Stable Pools
      • Pool Addresses
      • Swap Execution
      • Providing Liquidity
      • Flash Swaps
      • Contract Addresses
      • BuniCornRouter02
      • Pool
      • Pool (ERC-20)
      • Library
  • Subgraph API
    • Stable Pools
      • Entities
      • Sample queries
    • Flexible Pools
      • Entities
      • Sample queries
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  1. Introduction

AMM DEX

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.

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Last updated 3 years ago

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More details:

https://blog.buni.finance/a-dive-into-bunicorns-amm-f2608fb4aa8f