Automated Market Makers

One of the most quintessential DeFi products is the Automated Market Maker (AMM), which provides the mechanism to incorporate and facilitate liquidity in a trustless, non-custodial manner.  It accomplishes this through liquidity pools on decentralized exchange platforms (DEXs) that lock tokens in a smart contract, which consists of guidelines relating to asset pricing and swapping execution.

Users who supply pools with their cryptocurrency are called liquidity providers. In exchange for committing their capital they receive varying types of incentives and rewards, typically these rewards come in the form of liquidity provider (LP) tokens that can be staked on interest-bearing yield farming campaigns.  In addition, there are trading fees of varying percentages which accrue for the liquidity provider on all trades conducted in the pool proportional to their share in it.

While the benefits of liquidity pools along with AMMs have been nothing short of revolutionary, some downsides include susceptibility to arbitrage exploits and lack of risk management in relation to impermanent loss.  Therefore, they have a less flexible nature compared with market making on order books due to the volatility of indefinitely locking up assets into liquidity pools.

Smartpools, which allow a customizable weight of assets within a pool were created and popularized by Balancer as a result of these inherent problems of AMM’s in the marketplace.  Compared with the traditional 50/50 ratio on most AMM’s,  these smartpools can automatically update the weighting of a given pool through multiple parameters that are programmed into its smart contract code.  This perpetuates a constant data-driven re-evaluation within a pool serving to minimize the risk of impermanent loss as well as constitutes a form of automated portfolio management. 

Smartdex 2.0 Investment Pools

Autonio’s Smartpools on Smartdex 2.0 will provide an intelligent risk-adjusted way to invest through an active liquidity management solution. These smartpools incorporate algorithmic inventory management strategies and AI agents to generate sustainable yields.  Let’s break down these components further.

Smartpool portfolios will be able to adjust themselves accordingly based on market conditions.  On Smartdex 2.0 there will be multi-asset pools that utilize specific strategies in order to maximize profit potential; these will last a set period while having a maxed cap.  To explain, at the end of this given period the profits of a Smartpool will be distributed or can be claimed by the pool participants directly.

Over the course of the investment pool, information from all the events generated within it will also then funnel back into the AI agents.  This will help to further enhance its back-end foundation, which is already built on top of data gathered from orderbook-based exchanges, on-chain data, and social media sentiment.

In turn, all of these functions come together to help give rise to ‘The Intelligent Market Maker,’ the next evolution of AMM’s in DeFi and what sets Smartdex 2.0 apart.

Liquidity Bonds

Liquidity bonds, another unique feature of Smartdex 2.0, are assets sold to a user at a discount in return for providing liquidity in the form of various LP tokens. An innovative method for developing community-owned decentralized finance infrastructure.  The overall effect this has will be to drive and retain deeper liquidity for NIOX pairs.

Private Sales Pools

Private Sales are offerings that are made available before sales to the general public.  Since the token prices are usually lower in Private Sales, it usually requires a larger volume of investment.  These have become well-known in the crypto space as ICO’s (Initial Coin Offerings) or IDO’s (Initial DEX Offerings), 

Smartdex 2.0 will facilitate investments for several high quality projects through the use of private sales pools.

Single-asset staking vaults

For Cardano and Polygon, limited period staking vaults will also be available.

Have fun and happy trading with Autonio!