Maverick AMM features:Custom LP distributions–LPs no longer have to stake their liquidity in a uniform price range
Low LP maintenance–Automatic concentrated liquidity fee compounding
Increased capital efficiency–LPs can have the Maverick AMM smart contract automatically reposition their liquidity distribution to track the price so that their distribution is in range more often
Read more about Maverick AMM and its groundbreaking Dynamic Distribution features here.Problem: Concentrated Liquidity Isn’t Always Capital Efficient.
Concentrating liquidity was a game-changer for capital efficiency, but its implementation in current
AMMs puts the burden on users to move their own liquidity. This leads to misallocation and decreasing efficiency as prices move out of areas of concentration.Existing concentrated liquidity AMMs (i.e., Range AMMs) allow liquidity providers (LPs) to concentrate their liquidity within a defined range. So long as the pool price remains within that range, their capital efficiency remains high, meaning that their capital is at work, generating fees for them–more fees than they would earn in a constant product AMM, for example.Concentrated liquidity is only capital efficient while price remains in the area of concentration.The problem comes when the pool price moves outside of an LP’s range. At this point, their capital efficiency effectively drops to zero, as none of their capital is being put to work in the AMM. If the LP wants to remain capital efficient, they have to assume the responsibility of moving their liquidity to a new range, which costs them time and gas fees. In practice, many LPs have difficulty keeping up with price movement, and a lot of liquidity is left stagnant in Range AMMs.Solution: Natively Automate the Movement of Concentration Liquidity.Maverick AMM helps its users maximize capital efficiency by automating the reconcentration of liquidity as price moves. LPs can select from a variety of liquidity shifting modes that do the work of monitoring price and reconcentrating liquidity for them.Higher capital efficiency leads to more liquid markets, which means better prices for traders as well as more fees for liquidity providers. This built-in feature also helps LPs to eliminate the high gas fees that come from adjusting positions around price themselves.Problem: Current Native AMMs Are Built for a Sideways Market.With any existing AMM in the DeFi universe, an LP makes an implicit bet that the price of the pair of assets in their pool will go sideways, enabling them to collect trading fees without the ratio of their deposited assets shifting significantly. If that bet is wrong–that is, if the price moves in any direction other than sideways–the LP will suffer impermanent loss that may exceed any fees they collect.This is a huge limitation within the current AMM landscape, as many asset holders who would like to LP have a directional belief about the assets they hold. For example, if a user is bullish ETH, there is no existing LPing option that allows them to make a simple bet that the price of ETH will go up and collect trading fees from that bet. This deficiency in the tools available to LPs keeps many users from joining the market, leading to thin markets and bad pricing.Solution: Directional LPing.Liquidity providers can now choose to follow the price of an asset in a single direction, effectively making a bet on the price trajectory of a specific token. These directional bets are similar to single-sided liquidity strategies, in that the liquidity provider will be mostly or entirely exposed to a single asset in a given pool.Using a directional LPing mode, a Maverick LP can choose to follow the price of an asset up.As the price moves in the chosen direction, the AMM will automatically reconcentrate liquidity to follow it, in order to capture more fees. If an LP makes a correct bet on price direction, they can use this mode to enjoy re-concentrated liquidity around the price as it moves in their direction without experiencing any impermanent loss (IL).
Maverick is the first and only AMM with this capability.Read more about directional LPing here.Problem: LPs Can’t Control Their Own Liquidity.Existing Range AMMs let LPs define a price range for their liquidity and then the AMM distributes their liquidity for them across that range. This leaves the LP’s liquidity flat across the range, with no efficient means for them to arrange a different kind of distribution. Again, this limits the strategies available to potential LPs, who might be more willing to commit their capital to pools if they had more control over how it was distributed.
