v2

v2 is a major upgrade to Lifinity’s market making algorithm with wide-reaching benefits.

The key innovation behind v2 is that pools target the initially deposited amount of the base asset rather than a 50/50 ratio between the two assets. The target amount of the base asset is only updated when the price changes by a predetermined amount, at which point the pool rebalances to a 50/50 ratio at the new price.

Additionally, through its unique property of targeting a fixed amount of an asset in the pool, v2 enables price risk to be neutralized by borrowing the base asset or shorting its perp.

For a deeper dive on our v2, please see our Medium article on this topic.