Uniswap V2 Style Liquidity Pools on Pharaoh

Prior to concentrated liquidity, Uniswap v2 pairs were the standard for DeFi liquidity. Pharaoh implements these traditional pairs alongside stable pairs for correlated assets.

Legacy liquidity is simpler and more passive. Concentrated liquidity gives LPs more control over price ranges but requires more active management.

Swaps

On Pharaoh, users can swap tokens for other tokens. Each trade's exchange rate and slippage is determined by the total value of the liquidity pair and the current pair balance. Arbitrage activity helps keep pool prices aligned with broader market prices.

Pair Types

Pharaoh features two types of Liquidity Pairs, each with its own swap curve:

Volatile (Uni V2): This is the most common type of pair where tokens are paired with equal weights in terms of dollar value.
- $Volatile AMM constant product formula: x times y equals k, where x and y are token reserves and k is the constant invariant$
Stable (Correlated): These pairs use an optimized curve designed specifically for correlated assets like stablecoins. The curve features a modified invariant that allows for highly efficient swaps with minimal slippage between tokens of similar value.
- $Stable AMM invariant formula: x times y times the quantity (x squared plus y squared) equals k, optimized for correlated assets like stablecoins$

Swap Curves

Visualization

To provide a graphical representation of the swap curves, the graph below illustrates the variance between 0 and 100. It demonstrates that the Red (Correlated) curve exhibits less slippage from the mean as k fluctuates.

Red = Correlated Curve, Black = Volatile Swap Curve

Fee Structure

Adjustable Swap Fees

Pharaoh legacy pairs use adjustable swap fees based on pair type and market conditions. Fees typically range from:

Volatile (0.2-2%)
Correlated (0.001%-0.03%)
Native (1%-3%).

The theoretical MIN and MAX for legacy fees is (0.01<= Fee <= 5000bps). This means the minimum fee is 0.0001%, and the highest is 50.00%.

Pairs

In the x(3,3) metaDEX model, liquidity providers stake their LP tokens in a gauge to earn emissions from Pharaoh. Pharaoh encourages liquidity provision with incentives. The more votes allocated to a liquidity pair by xPHAR voters, the more PHAR that will be emitted to the gauge in the following epoch.

Rewards & Incentives

Legacy pairs can be staked to earn emissions and liquidity incentives. Once you have the LP tokens, you can deposit them within their corresponding gauge (if the pair is whitelisted), and start earning rewards in real-time! If a pair doesn't have a gauge, swap fees are automatically compounded into the pair.