The traditional feature of all DEXes is the ability to swap one asset for another provided enough liquidity is present for both in the pool. In order to ensure the sufficiency of the pool and supply just enough assets for users to swap, it is essential to incentivize and allow everyone to inject liquidity.
The process of swapping therefore constitutes the backbone on which the idea of Decentralized Exchange hinges on thus it requires a commensurably allocated amount of effort put into it. Jumbo utilizes a familiar structure of swapping and incentivization of liquidity-providing that rewards users proportionally from trading fees. The “Swap” essentially denotes the ability of actors to exchange assets in the pool in a permissionless and ungoverned manner.
Permissionless Liquidity Pools
Permissionless liquidity pools enable anyone to create and establish a liquidity pool for a specific asset without a need for any third-party’s confirmation. Jumbo implements a toolset that streamlines the creation of a liquidity pool for any project that is willing to be traded on the platform.
The only prerequisite for creating a permissionless liquidity pool is the provisioning of sufficient initial liquidity into the pool to ensure that the market created won’t be subjected to illiquid states.
On Jumbo permissionless pools can be created within a simple interface and by configuring a set of parameters for your asset.
On-the-fly Pool Transition
Jumbo accentuates the importance of User Experience and puts higher value on creating and designing a platform that eases the interaction with pools. Therefore Jumbo puts emphasis on the free-flowing nature of transitioning from one pool to another. This is an exceptionally useful tool that will facilitate higher earnings from each pool by changing to the most profitable one on the fly without imposing egregious fees because of the predictable pricing schema of Near Blockchain.
All that is needed in order to transition to any other arbitrary pool is to click one button that will frictionlessly transfer your current “stake” to another pool.
Smart Pool is the two-branch algorithm-based system that enables a highly convenient way to provide liquidity. Each pool on Jumbo DEX represents a separate instance to which users might want to provide liquidity to. Traditionally, a pool with higher APY is seen as the most likely candidate for providing liquidity. However, in general, APY is not necessarily representative of the most output since there are a lot of factors that can influence APY percentage in prospect. This is exactly what Smart Pool algorithm strives to achieve - homogeneous distribution of liquidity across pools and detection of the most prospective opportunities for providing liquidity.
Smart Pools is a set of functionalities and interface-embedded constituents that help to detect the most promising pools.
Jets represent the interface layer that notifies about a potential avenue for liquidity-providing. Essentially, Jets conveniently displays the most promising pools based on the correlative factor of Volume to Liquidity. This visually indicative interface aids in discovering underappreciated pools that in turn makes the pools on Jumbo DEX more homogenized.
Normally, slippage occurs at times of insufficient liquidity when the anticipated price and actual executed trading price differs. Slippage is especially prevalent at the heights of chaotic market conditions or aforementioned liquidity instability. One of the effective ways to combat high slippage is to create a sufficiently liquid market and voluminous enough trades. To reduce slippage and diminish potential losses for users during trades, Jumbo coalesces all of the above constituents that facilitate a more readily available transitioning between pools which in turn helps to keep liquidity pools uniform.