Maverick Protocol · Follow
Published in · 9 min read · Nov 26, 2021
--
Maverick Protocol offers a new infrastructure for decentralized finance, built to facilitate the most liquid markets for traders, liquidity providers, DAO treasuries, and developers, powered by a revolutionary Dynamic Distribution Automated Market Maker (AMM).
Maverick AMM features:
- Custom LP distributions–LPs no longer have to stake their liquidity in a uniform price range
- Low LP maintenance–Automatic concentrated liquidity fee compounding
- Increased capital efficiency–LPs can have the Maverick AMM smart contract automatically reposition their liquidity distribution to track the price so that their distribution is in range more often
Read more about Maverick AMM and its groundbreaking Dynamic Distribution features here.
Concentrating liquidity was a game-changer for capital efficiency, but its implementation in current AMMs puts the burden on users to move their own liquidity. This leads to misallocation and decreasing efficiency as prices move out of areas of concentration.
Existing concentrated liquidity AMMs (i.e., Range AMMs) allow liquidity providers (LPs) to concentrate their liquidity within a defined range. So long as the pool price remains within that range, their capital efficiency remains high, meaning that their capital is at work, generating fees for them–more fees than they would earn in a constant product AMM, for example.
The problem comes when the pool price moves outside of an LP’s range. At this point, their capital efficiency effectively drops to zero, as none of their capital is being put to work in the AMM. If the LP wants to remain capital efficient, they have to assume the responsibility of moving their liquidity to a new range, which costs them time and gas fees. In practice, many LPs have difficulty keeping up with price movement, and a lot of liquidity is left stagnant in Range AMMs.
Maverick AMM helps its users maximize capital efficiency by automating the reconcentration of liquidity as price moves. LPs can select from a variety of liquidity shifting modes that do the work of monitoring price and reconcentrating liquidity for them.
Higher capital efficiency leads to more liquid markets, which means better prices for traders as well as more fees for liquidity providers. This built-in feature also helps LPs to eliminate the high gas fees that come from adjusting positions around price themselves.
With any existing AMM in the DeFi universe, an LP makes an implicit bet that the price of the pair of assets in their pool will go sideways, enabling them to collect trading fees without the ratio of their deposited assets shifting significantly. If that bet is wrong–that is, if the price moves in any direction other than sideways–the LP will suffer impermanent loss that may exceed any fees they collect.
This is a huge limitation within the current AMM landscape, as many asset holders who would like to LP have a directional belief about the assets they hold. For example, if a user is bullish ETH, there is no existing LPing option that allows them to make a simple bet that the price of ETH will go up and collect trading fees from that bet. This deficiency in the tools available to LPs keeps many users from joining the market, leading to thin markets and bad pricing.
Liquidity providers can now choose to follow the price of an asset in a single direction, effectively making a bet on the price trajectory of a specific token. These directional bets are similar to single-sided liquidity strategies, in that the liquidity provider will be mostly or entirely exposed to a single asset in a given pool.
As the price moves in the chosen direction, the AMM will automatically reconcentrate liquidity to follow it, in order to capture more fees. If an LP makes a correct bet on price direction, they can use this mode to enjoy re-concentrated liquidity around the price as it moves in their direction without experiencing any impermanent loss (IL).
Maverick is the first and only AMM with this capability.
Read more about directional LPing here.
Existing Range AMMs let LPs define a price range for their liquidity and then the AMM distributes their liquidity for them across that range. This leaves the LP’s liquidity flat across the range, with no efficient means for them to arrange a different kind of distribution. Again, this limits the strategies available to potential LPs, who might be more willing to commit their capital to pools if they had more control over how it was distributed.
Maverick lets LPs configure their own distribution of liquidity along a pool’s price range. Maverick provides several pre-designed distributions, but an LP can also work bin-by-bin to tune their own custom liquidity strategy.
LPing a non-uniform distribution is useful, for example, for implementing risk-optimized LP positions like the exponential distribution described in this paper out of Harvard University. That paper showed how, given certain assumptions about price movement, a rational LP should balance their IL risk with their fee reward by LPing an exponential distribution of liquidity across price.
While it is possible to configure a complex liquidity distribution in other concentrated liquidity AMMs, this would normally require users to open multiple positions and mint several NFTs to support them. With Maverick, you can design your own custom distribution in a single position, using only one NFT.
Maverick AMM is intended to be a set of tools sophisticated enough to let LPs design and automate individual strategies for concentrating and moving liquidity.
Maverick AMM offers a range of out-of-the-box liquidity modes–static and moving–giving users the power to execute a greater variety of liquidity strategies.
Maverick AMM empowers liquidity providers with a set of tools to facilitate their own liquidity strategies.
Try your strategy out on Maverick today!
💰Liquidity Providers (LPs):
Active Liquidity Strategies: Maverick automates the reconcentration of liquidity natively. This means you can configure an active liquidity strategy that you don’t have to manage for yourself–saving you time and gas fees.
More Fees for LPs: Automated reconcentration also effectively eliminates the opportunities for third-party DApps (e.g., Charm, Gamma) to profit from liquidity provision on Maverick, leaving more on the table for LPs themselves.
Custom Liquidity Distributions: Using our intuitive UI you can choose exactly where to place your liquidity in every pool. Implement proven risk strategies or invent your own. What used to take multiple positions and cost more gas fees is now made even more efficient by Maverick AMM.
📈 Traders:
Better Prices: By automatically shifting liquidity to follow trading activity, Maverick ensures there is always a broad base of liquidity support around the market price. This results in better pricing and lower slippage for traders.
🪙 DAO Treasuries:
Low-maintenance Market Making: Maverick’s intelligent liquidity-shifting mechanism makes it straightforward to bootstrap liquidity for new markets, as well as protect against volatility and market manipulation. This presents projects with an apparatus for opening markets for their token and gaining price exposure to other assets.
A More Flexible Launchpad: Maverick’s easily customizable liquidity distributions can be used to guide the market to the desired price for your token, while rewarding early adopters for supporting your project.
Join Maverick’s Community on Telegram and Discord to learn more about the benefits of using Maverick.
Maverick’s ultimate goal is to be a decentralized platform owned by the community. A decentralization roadmap is being built to move control over to the community gradually. To achieve this goal, Maverick will be launching a MAV token. MAV token holders will be able to vote on decisions made by the protocol and stake their tokens to earn network fees.
Governance
Maverick wants every MAV token holder to have a voice. MAV tokens can be used to suggest protocol improvements or vote on proposals such as approved assets, partnerships, and the direction of the protocol.
Tokenomics
More details on Maverick tokenomic design will be disclosed in forthcoming announcements.
The Maverick development team brings together creative experts in the cryptocurrency space. Between them, they have built many original infrastructures for cryptocurrency: swap aggregator, Ethereum layer2, PoS public blockchain, DEX, decentralized storage networks, crypto lending, a crypto debit card, and quantitative digital asset investment. Members and advisors of the team have worked at leading companies such as Metamask, BitTorrent, Abra, TrueFi, Paxful, and LedgerPrime.
Pantera Capital
Jump Crypto
Altonomy, Circle Ventures, Coral DeFi, Gemini, GoldenTree Asset Management, LedgerPrime, Shima Capital, Spartan Group.
At Maverick, we believe that DeFi is about more than just technology and money — it’s about people. Team Maverick is proud to have an engaged and thriving community.
🙌 Join Maverick Community on Discord, Telegram, and Twitter
✉️ Contact us to get involved at info@mav.xyz
🌐 Check out Maverick’s dApp today.
DISCLAIMER: The information provided in this Medium Post pertaining to Maverick Protocol (the “Project”), its crypto-assets, business assets, strategy, and operations, is for general informational purposes only and is not a formal offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction and its content is not prescribed by securities laws. Information contained in this Medium Post should not be relied upon as advice to buy or sell or hold such securities or as an offer to sell such securities. This Medium Post does not take into account nor does it provide any tax, legal or investment advice or opinion regarding the specific investment objectives or financial situation of any person. The Project and its agents, advisors, directors, officers, employees and shareholders make no representation or warranties, expressed or implied, as to the accuracy of such information and the Project expressly disclaims any and all liability that may be based on such information or errors or omissions thereof. The Project reserves the right to amend or replace the information contained herein, in part or entirely, at any time, and undertakes no obligation to provide the recipient with access to the amended information or to notify the recipient thereof. The information contained in this Medium Post supersedes any prior Medium Post or conversation concerning the same, similar or related information. Any information, representations or statements not contained herein shall not be relied upon for any purpose. Neither the Project nor any of its representatives shall have any liability whatsoever, under contract, tort, trust or otherwise, to you or any person resulting from the use of the information in this Medium Post by you or any of your representatives or for omissions from the information in this Medium Post. Additionally, the Company undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed in this Medium Post.
