ActaFi Swap is a cross-chain liquidity aggregator with active liquidity and works using an Automated Market Maker (AMM), which is a smart contract that regulates trading. Since smart contracts are decentralised, users do not have to trade the order book of an exchange. Instead, they effectively trade against liquidity, provided by users.
The AMM protocol on ActaFi Swap makes use of concentrated liquidity, instead of passive liquidity. While previously all liquidity providers, other than Uniswap v3, provided liquidity passively across all available prices. Meanwhile, concentrated liquidity enables liquidity providers to choose limited price ranges to provide liquidity to. This allows for active strategies similar to market-making in traditional order book markets.
The returns of passive liquidity providers have decreased significantly with the introduction of concentrated liquidity, like on Uniswap v3. This is a direct result from active liquidity providers earning on average significantly more fees than passive LPs.
ActaFi Swap is a cross-chain liquidity aggregator that accumulates liquidity pools between different platforms, operating on a network. While trading on the ActaFi Swap, users not only trade with the ActaFi Swap liquidity pools, but also tap in the available liquidity on other Avalanche-based swaps, such as TraderjoeXYZ, Pangolin and others. As a liquidity framework, we facilitate the best possible outcome for the traders.
Combined with tokenbridges, that work as a secondary function on the backend, ActaFi Swap taps into an asset’s liquidity on any network.
Token bridges are a successful innovation to the DeFi industry, allowing users to migrate liquidity and assets from one network to another. Utilising tokenbridges, users are able to escape congested, slow, and expensive networks to use their assets in DeFi ecosystems that run on faster and cheaper networks.
To make an even better use of tokenbridges, ActaFi Swap will utilise tokenbridges to tap into asset liquidity on other networks as well before using the liquidity aggregator, to provide the best price possible for the buyer/seller.
ActaFi Swap offers the opportunity for liquidity providers to choose which swap protocol fee they provide liquidity to. At origin, there will be 3 internal liquidity pools available:
The AMM protocol automatically routes through the liquidity pools of ActaFi Swap, and cross-chain connected liquidity pools. By automatically arbitraging across price differences ActaFi Swap offers the most beneficial outcome for the trader in the industry.
Anyone can list a token on ActaFi Swap, but the listing entity will have to lock a minimum amount of liquidity for 12 months. Users will be able to report malicious token duplicates and get a reward in ACTA Tokens for their contribution to protect the traders. Projects have the possibility to set up farming pools on Acta Finance to incentivize liquidity providers.
Swap fees are immediately deposited into liquidity reserves. This increases the value of liquidity tokens, functioning as a payout to all liquidity providers proportional to their share of the pool. Fees are collected by burning liquidity tokens to remove a proportional share of the underlying reserves.