On November 9th, we completed the migration of MIDAS token to the Ethereum blockchain while simultaneously providing concentrated liquidity into MIDAS/ETH liquidity pool on Uniswap, which has subsequently served to reduce price impact for MIDAS and therefore lowered the Swap Fees on Midas platform.
What is Concentrated Liquidity?
Сoncentrated liquidity is liquidity allocated within a custom price range. In earlier versions of automated market makers (AMMs), liquidity was distributed uniformly along a price curve between zero and infinity. With UniSwap v3 concentrated liquidity mechanics, liquidity providers (LPs) may allocate their capital to price intervals smaller than (0, ∞), which enables individualized price curves, higher capital efficiency, and lower price impact.
For example: In a stablecoin/stablecoin pair, a liquidity provider may choose to allocate capital solely to the 0.99 – 1.01 range. As a result, traders are offered deeper liquidity around the mid-price, effectively reducing price impact as their liquidity is not spread across all possible price ranges.
Following the launch of MIDAS’ concentrated liquidity pool on UniSwap (MIDAS/ETH), those looking to swap MIDAS token on Midas’ platform can now enjoy lower swap fees.
Please note: The new fee structure is an approximation of fees users are expected to encounter and may vary depending on the price of MIDAS and the number of tokens in liquidity pools. For more information about concentrated liquidity and how it works, visit: https://docs.uniswap.org/protocol/concepts/V3-overview/concentrated-liquidity