In-Depth

Creating a Pool

  • Any user has the liberty to establish a Pool, tailoring parameters as they see fit for any market. Pool creators have the autonomy to set and potentially profit from fees. However, the Reference Pool we created does not have a fee set.

Pool Token

  • Upon investment in the Pool, users are granted Pool Tokens that are compliant with the ERC-20 standard, serving as a testament to their investment. Post the inception of the Pool, the creation or annihilation of Pool tokens is strictly contingent upon deposits or withdrawals.

Pool Valuation

  • A Pool's worth is derived from the aggregate of the liquidity it furnishes and the pending settlement tokens awaiting liquidity allocation.

Pool Token Pricing

  • The Pool Token's price is ascertained by the equation:

Pool  Token  Price=Valuation  of  PoolNumber  of  Total  Issued  TokensPool\;Token\;Price = \frac{Valuation\;of\;Pool}{Number\;of\;Total \;Issued\;Tokens}

Deposit to Pool

  • From Depositor: When depositing settlement tokens into the Pool, depositors are compensated with Pool tokens calculated as:

Pool  Tokens  Received=Deposit  AmountCurrent  Pool  Token  PricePool\;Tokens\;Received = \frac{Deposit\;Amount}{Current\;Pool\;Token\;Price}

  • To Pool: Upon deposit, the settlement token is promptly channeled to the appropriate bin, based on the predetermined Bin Allocation Ratio.

Withdrawl from Pool

  • To Withdrawer: Initiating a withdrawal necessitates the return of the Pool tokens to the Pool. The amount disbursed to the withdrawer is:

Settlement  Tokens  Received=Current  Pool  Token  Price×Number  of  Pool  TokensSettlement\;Tokens\;Received = Current\;Pool\; Token\;Price \times Number\;of\;Pool \;Tokens

  • From Pool: Upon receiving a withdrawal request, a proportionate amount, calculated as:

Proportion=Number  of  Returned  Pool  TokensNumber  of  Total  Issued  TokensProportion = \frac{Number\;of\;Returned\;Pool\;Tokens}{Number\;of\;Total \;Issued\;Tokens}

  • is retrieved from each bin and the Pool's settlement token reserve to be remitted to the withdrawer. Concurrently, the returned Pool tokens are obliterated. In scenarios where a bin's liquidity is insufficient, the deficit is offset from the settlement token reserve. If this reserve falls short, the Pool tokens equivalent to the uncovered value are reverted to the withdrawer.

Keeper Cost

  • The keeper's cost, which is used for rebalance costs of the Pool, is used from the settlement token holdings in the Pool.

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