Stable Pool

Overview

Stable Pool as its name, is a pool model designed for stablecoin tradings (1:1) in Zuit AMM, that can support tradings and swappings between almost all tokens.

• Support: Stablecoins (pools of USDT/USDC, etc.)

• Impermanent Loss: None

• Efficiency: Very High

• User Experience: Easy to use, fully passive

Stable Pool is fully automated and there is no need to do rebalancing, etc. It's a deposit-and-forget strategy with no impermanent loss risks (if tokens are pegged in 1:1, since both tokens are worth $1), and the capital efficiency is very nice.

Note: if one of a token is significantly depegged (below or higher than $1), there is likely impermanent loss. This is a rare case but was happened to popular stablecoins like USDT.

Highly optimized algorithm for stablecoins

The Stable Pool is highly optimized for stablecoin tradings and utilizes a hybrid algorithm of both the constant product and the constant sum.

The pool model performs as a constant sum AMM when the price is pegged around 1:1 to support highly efficient tradings.

$$x+y=k$$

And fallback to perform as the constant product AMM when the price is de-pegged.

$$x∗y=k$$

Stable Pool is optimized for assets like USDC/USDT that are pegged tightly around 1:1.

The pool will is highly efficient when two tokens are pegged at 1:1, but it is inefficient for uncorrelated assets like ETH/USDC.