The Sushi Next Generation AMM: Trident is now available.
We’re glad to tell that the majority of you came close, but not quite, to guessing what our well-kept 7/20 mystery reveal was going to be! We are happy that we were able to surprise the majority of you with this wonderful news, and we couldn’t be more thrilled to present to you this first look at The Sushi Next Generation. AMM:
Trident was initially created with a primary focus on capital efficiency and protecting against cryptocurrency volatility utilising strong, yet logical and user-friendly features to provide DeFi its new protocol standard. Our objective was to innovate without jeopardising user comfort with Sushi’s freshly redesigned and consolidated interface. Being a platform focused on the community, we receive invaluable feedback from our users every day. With that knowledge, we always work to enhance the DeFi experience for Sushi users, but we also recognised that DeFi users as a whole had several pain spots that made ordinary transactions either complicated or expensive, or both, leading to expensive, irrevocable blunders. With this in mind, we realised that we couldn’t be satisfied with minor tweaks to address minor design or site flow issues. Especially in light of the recent rehaul, it would be too much to ask the sushi community to relearn a new Sushi site. We required significant, fundamental changes, but more crucially, we required you, the members of our community, to scarcely notice them. Trident got its start as a result of discussions the Sushi team had with Andre Cronje of Yearn Finance regarding Deriswap as well as from the Mirin, Sushi AMM V2 proposal created by LevX, a core developer for Sushi.
Deriswap’s main goal was capital efficiency by the elimination of liquidity silos across different financial instruments, including:
Trading procedures (or swap-focused platforms, like Sushi)
Lending guidelines (or margin trading-focused platforms, like Aave)
Option protocols (iii) (like Deribit) You will notice throughout this Trident description the emphasis we have put on the capital efficiency of our next-generation AMM and how we have developed a method to seamlessly combine and interconnect Sushi’s numerous products to provide you with a DeFi experience you have never had before. The Mirin concept laid the groundwork for a portion of this freshly imagined DeFi future. Locals are ecstatic! Both the much awaited Franchised Pools and LevX’s projected expansion of liquidity provider (LP) curve choices are currently under development.
First Prong of the Trident
First Native AMM from BentoBox Lifts Trident To New Heights
Trident certainly qualifies as a “Next Generation AMM,” thanks to the strength of BentoBox, Sushi’s token vault. The BentoBox can also be seen as an architectural framework on top of which programmers can create sophisticated, cash-saving programmes like Trident. You already know that BentoBox enables for a single token approval for usage across all of its apps, saving you time and gas money, if you’ve tried it out—and we highly encourage doing so here with the Kashi platform! Additionally, BentoBox employs what are referred to as “strategies” to the assets stored within it, generating passive income for its consumers at no expense. Consider the BentoBox Sushi Strategy as an example to better illustrate. You will begin to earn Sushi.com platform fees from staking $SUSHI in the SushiBar if you take your $SUSHI tokens out of your wallet and deposit them into your BentoBox token vault without doing anything else and without paying any other gas fees outside the send fee from your wallet. Your BentoBox balance will automatically generate yields from strategies that are used on the vault even if your assets are sitting there doing nothing. One of the various tactics that can be used simultaneously with BentoBox is the sushi strategy. Trident was constructed on top of this powerful vault because of the potential it offered users and the virtually endless possibilities for designing strategies. This is also why we refer to this new AMM as the most capital-efficient DeFi system currently in use.
An Increase in Available Pool Types
Currently, the infrastructure of many decentralised exchanges is based on the constant product pool formula. Trident adds several pool types with the goal of becoming, at the very least, a superset of all AMM pool designs. This would alleviate many of the problems caused by the siloed liquidity issue and safeguard users from price fluctuations and other hazards experienced by cryptocurrency holders. Due to the rapid pace at which DeFi operates, innovations, ideas, and possibilities are developed and put into action, Trident’s straightforward integration of new pool types into the Sushi protocol helps to ensure that it is ready for any unanticipated changes to the DeFi horizon. I warned you that without this explanation, you wouldn’t even notice it! This integration is made possible by standardising the pool interface, which permits introducing new pool designs provided they comply with the protocol.
Always-On Product Pool
Recall that constant product pools are built up of two assets with equal financial values. To better illustrate, suppose you wanted to add $200 in liquidity to the existing Sushi AMM SUSHI-WETH pair. To accomplish your transaction, you would need to contribute $100 in SUSHI tokens and $100 in WETH tokens. If you only have SUSHI tokens worth $80, you can only match them with WETH tokens at $80 to bring $160 worth of liquidity to the AMM. Fortunately, these restrictions are no longer a problem because of the zap in/zap out feature! You can add any number of assets, and we’ll make an adjustment for you in the background to make everything equal. The term Automated Market Maker (AMM) refers to a pool type where swaps operate automatically as a result of the constant product formula, x*y=k.
To enable users to transfer like-kind assets with minimal price repercussions, hybrid pools were included. Users can incorporate up to 32 assets in a single hybrid pool! This, which is based on a stableswap curve, enables trading of comparable assets within a single pool with less intervention from external market variables or tokens that are plainly different.
Pool of Concentrated Liquidity
The concentrated liquidity pool, which asks users to pick the price range of the token asset to provide liquidity to, is one of the more intriguing pool kinds to splash onto Trident. As a liquidity provider on SushiSwap, you typically receive platform transaction fees from swaps inside your LP pool at a rate equal to your share of the pool as a whole, regardless of the price of a token. Your part of the pool may diminish until it is nearly nothing when DeFi protocols like Sushi gain popularity. The lack of LP incentive caused by unappealing pool shares is something that this pool style seeks to address. Liquidity providers will be able to choose the token price range in which they want to receive platform fees, as seen in the image on the left. This is done in the hopes that a larger portion of the pool, which you must split with other providers, will be distributed more equitably among different ranges, giving you a larger cut of the pie in your chosen range and resulting in higher fee accumulation. The main advantage of concentrated liquidity pools is that it will enable liquidity providers to more precisely target their liquidity provisioning in order to increase their share of platform swap fees on Sushi.com.
Routing engine: Tines
Our new routing engine, Tines, was created for the front end to improve the clarity of the Sushi user interface. An effective multihop, multiroute swap router is Tines. Multiroute searches several paths a token takes to exchange into another, while multihop searches multiple pools to complete a. To determine the optimal price, Tines will run queries on a variety of our pool types while taking into account things like gas prices, price implications, and graph topology. Trident’s addition to Sushi’s many pools allows the multihop to search through more opportunities for low-priced options, enhancing the functionality of the SushiSwap swap function. You may recall that when you perform a swap on Sushi.com, the route of your swap will appear in the transaction’s information (SUSHI WETH AXS, for example). We refer to the act of transferring the from token to the common denominator token pair of the to token when swapping as taking a route because there are no Sushi — Axie Infinity pools on Sushi, but there are AXS — WETH pairs and SUSHI — WETH pairs. In the past, we had to stick to certain route types when doing a swap, but now that Tines has multiroute functionality, we can perform trades horizontally to reduce pricing affects (slippage). Different pool types perform better with various asset types. As an illustration, similar assets like wBTC and renBTC typically perform better in hybrid pools. Tines will enable routing more successfully so that several pools function as a single pool, greatly reducing price affects.
At Sushi, we are adamant that DeFi standardisation will encourage widespread use of protocols across the board. In keeping with this belief, we will maintain an open source ecosystem up until and after that standard is established. We view it as a matter of principle to release all software created by the Sushi team to be under GPL3 or other permissive OSS licences since our new set of Next Generation AMM: Trident contracts are GPL3.