Wombat Exchange
Wombat Exchange

Invariant Curve

With the above definition in mind, Wombat’s invariant curve is defined as follows:
∑Lx(rx−Arx)=D\sum{L_x (r_x - \frac{A}{r_x})} = D
= coverage ratio of token x
= amplification factor
During a swap, the right-hand side of the invariant remains constant.
The invariant has some favorable properties, including:
  • The number of assets in a pool is unlimited. One can add and remove assets on the fly.
  • The weight of assets is flexible. A protocol can emit more rewards to a token in the pool with higher buy pressure to selectively deepen liquidity.
  • Users can provide single-sided liquidity.
For the main pool, we use A = 0.002, and it would be revised on a needed basis.