LOVELY SWAP: LOVE IS IN THE AMM
To be honest, multichain non-custodial Automated Market Makers are two for a dime these days. Hold on, what is an Automated Market Maker?
The Decentralized Finance niche of the cryptocurrency world is all about the Automated Market Makers (AMMs) and it permits assets to be traded in a permissionless and automatic way by using liquidity pools rather than a traditional market of buyers and sellers. AMM users supply liquidity pools with crypto tokens, whose prices are determined by a constant mathematical formula. Liquidity pools can be optimized for different purposes.
AMMs are a financial tool unique to the Binance Smart Chain and decentralized finance (DeFi). This new technology is decentralized, always available for trading, and does not rely on the traditional interaction between buyers and sellers. This new method of exchanging assets embodies the ideals of Ethereum, crypto, and blockchain technology in general: no one entity controls the system, and anyone can build new solutions and participate.
Liquidity Pools and Liquidity Providers
Liquidity in cryptocurrency markets essentially refers to the relative ease with which tokens can be swapped for other tokens or fiat. One way a market achieves liquidity is through the use of order books, like in a stock market. Here buyers and sellers of an asset place orders: they specify a price and quantity of the asset that they would like to buy or sell, as the case may be. An exchange, such as a stock exchange, then matches buy and sell orders to establish a price for the asset. AMMs made Decentralized Finance what it is today: A stronghold in the cryptocurrency space. As a new technology with a complicated interface, the number of buyers and sellers was small, which meant it was difficult to find enough people willing to trade on a regular basis. AMMs fix this problem of limited liquidity by creating liquidity pools and giving the providers of the liquidity the incentive to supply these pools with assets. The more assets in a pool and the more liquidity the pool has, the easier trading becomes on decentralized exchanges. Anyone with an internet connection and in possession of any type of Bep 20 token can become a liquidity provider by supplying tokens to an AMM’s liquidity pool. Liquidity providers normally earn a fee for providing tokens to the pool. This fee is paid by traders who interact with the liquidity pool.
What is LOVELY V3 SWAP?
A spinoff from the indefatigable Lovely Inu project, the Lovely V3 Swap is a Multi Chain Supported Automated Market Maker, Implemented first on the Binance Smart Chain.
LOVELY V3 Swap provides increased capital efficiency and fine-tuned control to liquidity providers, improves the accuracy and convenience of the price oracle, and has a more flexible fee structure. This is an upgrade from the previous versions of the protocol, just like Uniswap. The protocol is implemented as a set of persistent, non-upgradable smart contracts; designed to prioritize censorship resistance, security, and self-custody, and to function without any trusted intermediaries who may selectively restrict access.
How does the LOVELY V3 Swap protocol compare to a typical market?
On AMM platforms like Lovely Swap, instead of trading between buyers and sellers, users trade against a liquidity pool, which is basically a shared pot of tokens. Users supply liquidity pools with tokens and the price of the tokens in the pool is determined by a mathematical formula. By tweaking the formula, liquidity pools can be optimized for different purposes.
Centralized systems utilize an order book style of exchange, where buyers and sellers create orders organized by price level that is progressively filled as demand shifts. Anyone who has traded stocks through brokerage firms will be familiar with an order book system. Lovely Swap protocol takes a different approach, using an Automated Market Maker (AMM), sometimes referred to as a Constant Function Market Maker, in place of an order book. Thus the Swap replaces the buy and sell orders in an order book market with a liquidity pool of two assets, both valued relative to each other. As one asset is traded for the other, the relative prices of the two assets shift, and a new market rate for both is determined. In this dynamic, a buyer or seller trades directly with the pool, rather than with specific orders left by other parties. The advantages and disadvantages of Automated Market Makers versus their traditional order book counterparts are under active research by a growing number of parties. We have collected some notable examples on our research page. Also Lovely Swap is Open. This means that the protocol’s services are entirely permissionless without selecting who can or cannot use them. Anyone can swap, provide liquidity, or create new markets at will. This is a departure from traditional financial services, which typically restrict access based on geography, wealth status, and age.
About Lovely Inu
Lovely Inu, is a project that is brought to revolutionize the industry of meme tokens. Usually, all meme tokens seem useless with no obvious use cases, poor liquidity, no long-term perspective, and thus low adoption. To change this unwanted narrative, the team of crypto enthusiasts decided to launch a project called Lovely Inu with its primary purpose to revolutionize the meme token industry with the creation of its own unique ecosystem. Lovely Inu is a utility token key to products such as V3 Swap on BNB Smart Chain, a gaming platform with live casinos, a launchpad, a crypto wallet, and more.For now, Lovely Inu founders' main goal is to enter the global crypto market. To do so, they are going to launch 5 buyback events and list their token on 5 more crypto exchanges. The events will take place in August, September, and October: the exact dates are published on the Lovely Inu website
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About the Author
Joseph Johns is a successful Emergency Medicine Physician and an ardent cryptocurrency and Blockchain connoisseur
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