# What is Lifinity?

Lifinity is the first proactive market maker on Solana designed to improve capital efficiency and reduce impermanent loss.

Lifinity's DEX innovations:

* Concentrated liquidity combined with lazy liquidity provision; no need to adjust positions
* Reduces or even reverses impermanent loss by using an oracle as the main pricing mechanism
* Generates a profit from market making through delayed rebalancing of pools

Lifinity's tokenomics innovations:

* The protocol continuously acquires liquidity for all token pairs the DEX provides liquidity for
* Improved veToken model with optional decaying, linear unlocking, and native tokenization
* Token launch via a veIDO

Lifinity also has a collection of NFTs called Flares:

* 10,000 animated NFTs
* All Flare sale proceeds were deposited into Lifinity’s liquidity pools
* All revenue from trading fees and royalties are used for buybacks and reinvestment
* If Flares fall below 50% of their mint price, they are bought back with the pooled funds
* 1% of the LFNTY token supply was distributed to Flare holders

{% hint style="info" %}
Our documentation explains the *what* of our protocol without getting into the *why*. To get the full picture, we recommend reading our [tokenomics series](https://medium.com/@lifinity.io/lifinity-tokenomics-series-part-1-liquidity-mining-and-protocol-owned-liquidity-a7dade99ecf4) and [Flares article](https://medium.com/@lifinity.io/lifinity-flares-a-merging-of-defi-nfts-1355e4c99416).
{% endhint %}


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