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The new AMM will provide depositors four customisable pool options as well as significant capital efficiency.
Sushi, the decentralised finance (DeFi) platform, has finally revealed the long-awaited “7/20” project update after months of bluster and braggadocio — but it remains to be seen whether the new product can live up to the promise.
Sushi CTO Joseph Delong took the stage this morning at the Ethereum Community Conference in Paris to unveil Trident, a new hybrid automated market maker (AMM).
Trident will feature four AMM models, including constant product pools similar to the current SushiSwap, hybrid pools similar to Curve that allow for the efficient exchange of like-kind assets such as stablecoins, concentrated liquidity pools similar to the functionality Uniswap v3 offers, and weighted pools similar those available through Balancer.
The Summer of $SUSHI is upon us, a dawn of a new season. The scent of Shoyu, Miso, and Mirin waft through the air.
What surprises do the chefs have in store for us?
We shall find out soon enough…
— BΞN (@__DeFi__) June 18, 2021
Trades on the new platform will work through Tines, a new order-matching engine that will examine all four pool types for the most efficient swaps. Limit orders and the option for pool deployers to save gas by eliminating time-weighted average price oracles in favour of Chainlink oracles are two new and unusual tools. Furthermore, because all four AMMs are based on Sushi’s BentoBox fractional reserve platform, unused liquidity will earn additional interest through lending methods.
Finally, Sushi has “franchise pools” on its pipeline, which are specialised pools that cater to Know Your Customer/Anti-Money Laundering demands for exchanges and other institutional customers, and could be a complement to Aave’s upcoming institutional lending pools.
Delong told Cointelegraph in an exclusive interview that while there is no definite timetable for the introduction of Trident, users should expect it to be “more than 30 days post-7/20, but less than 60.”
Sushi is a former fork of Uniswap, but the crew is confident in its development abilities. The company says in early Trident documentation draughts shared to Cointelegraph that the most comprehensive post-fork product it has yet to bring to market “will be the most capital-efficient AMM in existence at launch,” according to early Trident documentation draughts.
“This is the place to do it”
Though critics may point out that all of Trident’s AMM models have been theorized and even built before,Delong was eager to point out that Trident’s implementations are entire code rewrites from the bottom up.
The team used Andre Cronje’s Deriswap as a “starting point,” however it opted for safer tactics over Cronje’s idea of using unused pool liquidity for options writing. Similarly, LevX’s work on Mirin provided early models for the hybrid pools — a pair of beginning points that led to the four-model hybrid.
Delong points out that while new and existing AMMs can presently only offer one AMM model, having a platform that can accept a variety of assets is critical to drawing liquidity from across the ecosystem.
“The real design for this implementation is that certain tokens excel with certain AMM types. Long-tail shitcoins excel with constant-product pools. Like-kind assets excel at the hybrid swap. Blue chips do really well with concentrated liquidity positions. That’s all nice, but the thing that really ties it all together is our new routing engine, Tines.”
Tines takes into consideration both gas fees and liquidity and is capable of going both “horizontal” and “vertical” when routing — what Delong calls “multi-route and multi-hop.” Multi-route is similar to 1inch, where the routing engine moves through multiple pools to mitigate diminishing returns, and multi-hop refers to bouncing between assets in order to achieve the same.
In addition to casting a wide net to attract traders, Trident will offer liquidity providers attractive incentives. Trident is a “native application” to the BentoBox base layer, a large, aggregated pool where upward of 80% of deposited tokens can be used in yield-bearing strategies rather than sitting unused. Delong notes that even liquidity used for limit orders will be able to sit bearing yield as traders wait for their set prices to arrive.
Currently, the team only has a Compound deposit strategy, but it’s prospecting other options, and Delong made it clear that the company is open to hiring on that front, as it’s shortly about to have $2 billion in total value locked that can be put to work.
All that matters now is our response – see you on the other side of 7/20 🍣 pic.twitter.com/bUJDqrjRqn
— Joseph Delong 🔱 (@josephdelong) July 1, 2021
Delong also noted that Trident’s UI/UX for providing liquidity “will seem obvious in hindsight” and that liquidity provider positions will be represented as ERC-1155s as opposed to ERC-721s, which the team hopes will add a degree of fungibility to the positions and make trading them on secondary markets easier.
When asked who Trident will most appeal to, Delong said that “anyone with idle capital” will benefit from Trident’s capital efficiency.
“Any application that has tokens that sit dormant, like Sablier — wouldn’t it be great if those tokens that sit in Sablier could be used in strategies? If you want to raise the capital efficiency of anything that you’re doing, this is the place to do it.”
Forks and fundamentals
Trident and Tines, as names, are no accidents and, in fact, might be seen as an attempt to appropriate the “fork” label and turn it into something more powerful, said Delong.
“The Trident name comes from Cobie, when we were talking about being a fork,” he told Cointelegraph. “That’s what most people say about us. That’s kind of a hard moniker to shake… it feels like graduation day in a way.”
He celebrates “taking on the mantle” as a leading AMM, relishing in the challenges of the team being forced to make its own design decisions, facing gas efficiency tradeoffs and laying the groundwork for more development in the future.
Still, detractors might point out that, for all of the optimizations, Trident remains a kind of fork in spirit; aside from a handful of features, there’s nothing truly new.
“That worries me,” he said. “I know what we built, and I know we built the best system that’s out there. But that does worry me.”
While completely new technologies “have yet to be constructed,” he added that BentoBox and Trident are adaptable enough to handle them — but before, “we have to ship,” he laughed.
Furthermore, the former fork accepts competition that is akin to the latter. Sushi has chosen to open the complete Trident and Tines under the GPL3, which Delong describes as one of the “extremely permissive licences that symbolises the gold standard in open source.”
According to Delong, the licence is an invitation to challenge them.
“Fork us. Have fun. We don’t care. It’s going to be hard to fork out our community.”