Maverick Protocol: The First Dynamic Distribution AMM
The Maverick Protocol emerges as a fresh infrastructure solution tailored for the ever-evolving DeFi environment. It refines liquidity management for providers, harnessing an Automated Market Maker (AMM) model enriched with dynamic distribution capabilities.
The Maverick AMM is manifested as a decentralized application anchored on the Ethereum blockchain and further fortified by the zkSync Era network. Notably, this dApp boasts compatibility with a spectrum of well-regarded cryptocurrency wallets, encompassing Metamask, Ledger, Coinbase Wallet, WalletConnect, and Torus.
Much like the majority of Decentralized Exchanges (DEXes), Maverick Protocol's approach is intuitive. Its AMM facilitates immediate crypto trades, setting prices automatically. This swift transaction process is enabled by liquidity providers, who, by depositing their tokens into the designated pool smart contracts, in turn, earn a share of the transaction fees.
The dApp's sections are distinctly demarcated as:
- Exchange: A straightforward terminal geared for efficient cryptocurrency and token transactions.
- Pools: A specialized module where liquidity providers can channel tokens into the AMM smart contracts.
- Portfolio: A discerning interface that captures both the injected liquidity and its ongoing value shifts.
While the brains behind this groundbreaking protocol remain shrouded in mystery, the project's technical dossier reveals involvement from stalwarts of the crypto realm, boasting stints at revered entities like Metamask, BitTorrent, TrueFi, Paxful, and Ledger.
How Maverick Protocol bolsters liquidity providers
The concept of a Range AMM, as seen in platforms like Uniswap v3, focuses on centralizing liquidity within a predetermined price bracket.
But it's not without its limitations. Rewards and profits for providers are contingent upon the token price in the pool remaining within these set brackets. If it deviates, the accrued benefits diminish, prompting liquidity providers to recalibrate their token distributions.
This is where the Maverick’s AMM steps in, offering an evolved solution. It's designed to nimbly adjust liquidity in line with price variations, all hinged on a predefined strategy. Furthermore, its dynamic nature allows for the formulation of tailored modes, concentrating liquidity within specific price ranges. This innovation offers a balanced approach, aiming to mitigate risks, optimize returns, and ensure efficient fee structures.
Illustration showcasing the evolution of market makers. Source — medium.com/maverick-protocol
Providers have various AMM configuration modes, streamlining price tracking and liquidity redistribution:
- Mode Right. Tailored for ascending price scenarios. As prices soar, liquidity tokens adjust in sync. However, if the tide turns and prices recede, liquidity remains untouched.
- Mode Left. This is the counter to Mode Right, coming into play when token prices wane. Activating this mode lets LP positions decrease with falling asset values, yet if fortunes reverse and prices climb, liquidity holds steady.
- Mode Both. Useful for sideways trends, where prices neither soar nor plummet. The liquidity shadow token prices, whether they go up or down.
- Mode Static. Here, the provider sets the liquidity tone, crafting a distribution that doesn't flinch in response to price fluctuations.
This design approach bolsters the capital efficiency of liquidity providers.
About the MAV token
At its core, MAV, an ERC-20 token, serves both utility and governance functions. Its debut on June 28, 2023, was notable for its integration of the Omnichain Fungible Token (OFT) courtesy of LayerZero. This ensures MAV's compatibility not just with Ethereum but also with zkSync Era. Of the maximum Maverick token supply of 2 billion, 250 million tokens are currently in circulation.
Infographic on MAV token allocation, source — medium.com/maverick-protocol
MAV also features an escrow capability. When users stake their tokens, they not only receive passive income but also acquire veMAV, a governance token. This token amplifies their influence over decisions within the Maverick Protocol. The prominence of one's voice directly correlates to the amount of veMAV held. The balance of the governance token is influenced by both the quantity of MAV staked and the staking duration.
The Maverick Protocol, in essence, is an AMM with a twist: dynamic liquidity distribution. Providers are offered the luxury of not just setting their price boundaries but also adapting them in real-time, tracking market heartbeats.
Users are in the driver's seat, designating their liquidity's direction, and enhancing potential gains. Maverick's smart contracts serve as choreographers, ensuring in-pool tokens transition smoothly, enabling providers to maintain a fluid liquidity landscape, even as market prices sway.
