Ref V2 — Unlock concentrated liquidity for better capital efficiency

Efficient swap fee earnings and less impermanent loss.

Introduction

The launch of concentrated liquidity AMM is an achievement for Ref Finance and de facto the NEAR ecosystem. First, what is concentrated liquidity? It is the liquidity allocated within a custom price range. With the mechanics of concentrated liquidity, liquidity providers (LPs) can accumulate capital with smaller price intervals than (0, ∞), enabling individualized price curves. Which could potentially improve 4000x higher capital efficiency for traders.

Ref Finance is always on the lookout for ways to offer more value to users in regards to their liquidity. With this in mind, the launch of concentrated liquidity on Ref is an incremental new key feature for the NEAR ecosystem in the Rust environment brought to you in partnership with Izumi Finance and Arctic.

Key Features — The difference of features between V2 and V1

• Liquidity Providers can now put liquidity in a range, with efficient swap fee earnings and less impermanent loss.
• Limit-Order as a one-way liquidity, brings up CEX order-book style user experience;
• With much thicker liquidity around the current price point, swap slippage has a notable decrease.

Key Features — The difference of features between Ref V2 and Uniswap V3

• Using constant sum formula on small price range fragment instead of constant production formula, the support of limit order has a remarkable improvement.
• Users can place limit buy orders at a price higher than current price or sell orders lower than current price. Ref V2 would auto match with best price first, similar to CLOBs (central limit order books) seen on centralized exchanges.
• As a kind of one-way liquidity, it is not necessary to keep an eye on the Ref V2 limit order deal progress. Users can claim their order earning at any time without any concern that the earned token would be reverted.
• Improved fee structure: Only takers or market makers would pay a fee for an open order. Thus, only LPs (and the protocol itself) can benefit from swap fees.

All this to say that the concentrated liquidity model offers you two options:

1. To provide liquidity across a full range, in order to spread your assets thin with lower rates of return but lesser risk of falling out of range;
2. To narrow your range in accordance to the market’s conditions to increase capital efficiency and earn more fees.

As mentioned above, we’ve compared our development features of this model in comparison to Uniswap’s model, from Ethereum to NEAR, but far less costly.. Ref V2 provides a more capital efficient, user-friendly experience with dynamic pricing, reduced fees, and cross-chain integrations.

Audit

Smart contract security is a top priority for a DeFi protocol, which is why the core contract codebase is currently under audit by BlockSec and bug bounties will be listed on Immunify approaching the mainnet launch.

Testing Season

Last but not least, test it out on testnet -> https://testnet.ref-finance.com/

Currently, 3 concentrated liquidity pools are created:

1. usdt-near-0.2% fee: 6000 usdt — 1100 near, 5.2 usdt/near
2. ref-usdt-0.2% fee: 30k ref — 19k usdt, 0.5 usdt/ref
3. usn-usdt-0.01% fee: 20k — 20k, 1 usdt/usn

Or you can also create your own liquidity at:
https://testnet.ref-finance.com/addLiquidityV3

Get in touch with us

If you are a DEX market maker, or have experience with DEX market making, or simply have questions about Ref Finance, wish to partner, we are reachable at business@ref.finance, our telegram and discord. Don’t miss us at NEARCON 2022.

Your DEX, your assets, your liquidity.