💱Stableswap

StableBase is an automated market maker (AMM) function focused on swapping between correlated assets - that include stablecoins & pegged-value cryptos (e.g. LSDs) - with minimal slippage for traders and more efficient trading for liquidity providers. This includes USD-pegged stablecoins (like DAI and USDC), but also ETH and sETH (synthetic ETH) or different versions of wrapped BTC.

Algorithm

StableBase is a hybrid AMM that combines both Constant Product and Constant Sum models, and the following chart shows the Stableswap algorithm in relation to constant product and constant sum invariants.

  • Constant Sum: When the liquidity pool portfolio is balanced, the algorithm functions as a Constant Sum formula; x + y = k. You can observe the StableSwap blue line staying close to the Constant Sum red line, and the price is stable.

  • Constant Product: As the liquidity pool portfolio becomes imbalanced, the StableSwap algorithm functions as a Constant Product formula; x * y = k. You can observe the StableSwap blue line now resembling the Constant Product purple line, and the price becoming expensive.

A StableBase pool is an implementation of the StableSwap invariant with 2 or more tokens, which can be referred to as a plain pool. Alternative and more complex pool flavors include pools with lending functionality, so-called lending pools, as well as metapools, which are pools that allow for the exchange of one or more tokens with the tokens of one or more underlying base pools.

Value-Accrual

When you conduct a Swap (trade) on the StableBase you will pay lower trading fees, than the usual 0.25% on normal AMM. The fee attribution is broken down as follows:

  • 65% to the LP as rewards

  • 15% to the Protocol

  • 20% to SBASE stakers

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