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Symbiosis Liquidity Pools
Each crypto swap with the Symbiosis protocol proceeds through our concentrated liquidity pools. Learn more about AMM, what AMM designs do we use for cross-chain operations, and more.
Looking for SDKs and API? Please check out our documentation for software developers Symbiosis Developer Tools
The Symbiosis protocol works with a particular stablecoin on each supported blockchain. This stablecoin has its wrapped representation (sToken) on another blockchain with a ratio 1:1 to its locked original. For example, it is USDC on Ethereum, and its wrapped representation is sUSDC on BNB, Avalanche, Polygon, and Boba.
Let's consider a cross-chain swap MATIC on Polygon for AWAX on Avalanche as an example of cross-chain operation conducted via Symbiosis protocol V2 (Scheme 1).
Scheme 1: An example of cross-chain operation via Symbiosis protocol V2.
As you can see, Symbiosis protocol V2 uses a number of liquidity pools. However, only one of these liquidity pools belongs to the Symbiosis protocol: Octopool which contains multiple stablecoins and located on S-chain (Scheme 2).
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Scheme 2. Symbiosis protocol V2 with Octopool.
Octopool is a Platypus- / Wombat-like AMM and it allows:
- New tokens to be added to the existing pool,
- Single-sided liquidity provision/withdrawal,
- Any token to any token swap within the pool (there are no token-pair constraints).
The Octopool provides great capital efficiency for cross-chain operations. It's used only when particular stablecoins go from one blockchain to another. Third-party liquidity pools are used in two cases for:
- Getting particular stablecoins on the source blockchain before going to another blockchain,
- Exchanging stablecoins on the destination blockchain in case the token the user wants to get differs from the stablecoin the Symbiosis protocol works with on the destination blockchain.
For example, if a user wants to exchange USDCs on Polygon for USDTs on Avalanche only Octopool will be used for this cross-chain swap, no third-party liquidity pools will be involved.
The lifespan of Symbiosis protocol V1 has peacefully reached its end, and we stopped it.
Symbiosis protocol V1 uses a number of liquidity pools to do cross-chain operations. However, only one type of these liquidity pools belongs to the Symbiosis protocol: Nerve-like liquidity pools with {stablecoin <> sToken} pairs.
The liquidity pools owned by Symbiosis contain stablecoin pairs with one exception: Milkomeda. The liquidity pool on Milkomeda has a stablecoin — non-stablecoin pair: {sUSDC < > MilkADA}, where sUSDC is a representation of USDC token from Ethereum.
Those liquidity pools are used to bridge blockchains. Scheme 2 shows the liquidity pools owned by Symbiosis.
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Scheme 2. Nerve-like liquidity pools with {stablecoin <> sToken} pairs
Symbiosis protocol V1 owns one Nerve-like liquidity pool {stablecoin <> sToken} for every blockchain’s pair that supports direct cross-chain swaps. Such a liquidity pool is located on the blockchain with the lowest gas fee (in the USD equivalent) of the pair and contains:
- The stablecoin chosen for this blockchain,
- The wrapped representation of the stablecoin of another blockchain (sToken).
Why is there just one liquidity pool with sToken for a blockchain pair?
There are three reasons:
- 1.One liquidity pool with total liquidity is better than two pools with half liquidity each,
- 2.A pool on the blockchain with lower gas fees (in the USD equivalent) reduces operating costs,
- 3.Some blockchains are more reliable and easy to operate.
The liquidity pools owned by Symbiosis are used only when particular stablecoins go from one blockchain to another. Third-party liquidity pools are used in two cases for:
- Getting particular stablecoins on the source blockchain before going to another blockchain,
- Exchanging stablecoins on the destination blockchain in case the token the user wants to get differs from the stablecoin the Symbiosis protocol works with on the destination blockchain.