[Trader Joe XYZ](https://traderjoexyz.com/avalanche), a decentralised exchange (DEX) functioning on Avalanche, has [unveiled](https://medium.com/avalancheavax/trader-joe-presents-liquidity-book-a-new-amm-design-for-defi-39abf87e0d7f) a new automated market maker (AMM) design called Liquidity Book. 

This innovative design aims to enhance capital efficiency, decrease slippage, and reduce the effects of impermanent loss. 

According to Trader Joe XYZ, the existing trading algorithm of the DEX operates on the widely-used x*y=k automated market maker (AMM) formula. The exchange has attracted thousands of daily active users and facilitated trading worth over $88 billion since its launch in July 2021. 

## What makes the Liquidity Book unique? 

It offers a unique approach to stacking liquidity in pools. Liquidity providers (LPs) can deposit into specific price bins, with each bin assigned a special price. 

LPs can provide liquefied assets to multiple bins and receive fungible token receipts for all assets deposited. This sets Liquidity Book apart from other solutions that lack non-fungible token receipts. 

LPs can earn higher fees while minimising capital risk by providing liquefied assets through the Liquidity Book. This benefit also extends to traders, who can access better prices and reduce slippage on[ trades](/news/article/crypto-trader-2022) due to increased efficiency. Unlike traditional AMMs, where assets are spread evenly across all price ranges, users can provide liquefied assets at specific prices, resulting in fewer idle assets and significant efficiency improvements up to 20,000 times higher. 

The discrete bin architecture also allows for issuing NFT receipts, which can be integrated with other [DeFi](/news/article/defi-llama-decentralised-analytics-dashboard) protocols and products. The more composable the design, the greater the potential for growth in DeFi. 

## Zero slippage swaps 

The fresh AMM design employs a structure combining individual bins to form a liquidity Pool, aggregating liquified assets from all the bins. 

Unlike existing AMM designs that utilise a constant product formula, the bins in this AMM act as constant sum pools with their reserves. This approach prevents traders from overpaying for fewer tokens, as often with pool reserve price calculations. 

It uses an active bin to determine the price, which remains constant within that particular bin. Thus, there is zero slippage if the trade is executed using reserves from the active bin. However, a change in the bin occurs when reserves in the active bin are insufficient to fulfil the trade, resulting in a price impact. This feature is especially useful for swaps involving stablecoins and other pegged assets, whose prices are expected to be equal most of the time. Although the AMM model has undergone significant advancements, noteworthy drawbacks and challenges still require solutions and improvements. 

Liquidity Book aims to provide traders with more efficient trades, offering asset providers increased efficiency, protection against impermanent loss, and maximum composability of their liquidity. 

trader joe xyz logo on blue image of stocks

Trader Joe XYZ launches new AMM Liquidity Book 

## Your ultimate guide to Platypus Finance 

A single-sided Automatic Market Maker (AMM) for[ stablecoins,](/news/article/what-are-stablecoins) Platypus Finance was created on the [Avalanche Network](/news/article/what-is-avax-wallet), which was designed to enhance capital efficiency. 

Instead of mandating liquidity providers (LPs) to offer liquidity by pairing tokens (e.g., ETH-AVAX), LPs have the option to provide liquidity by offering a single type of token. 

This mechanism was introduced as a way for LPs to offer liquidity with a single token type instead of the traditional pair tokens, ultimately reducing the impermanent loss for LPs while also increasing trading efficiency. Platypus works on the principle of asset liability, which is where LPs always receive the same amount and type of token that was deposited by them originally, along with any rewards they earned whenever they choose to withdraw from the liquidity pool. 

In many existing AMMs, there are several design flaws when it comes to things like impermanent loss risk, capital inefficiencies, and UX fragmentation. Platypus Finance was made to overcome these problems and work by enhancing the process on current frameworks. Platypus Finance has developed a single-sided liquidity provision mechanism called StableSwap. 

## StableSwap 

StableSwap is a smart way of exchanging cryptocurrencies, allowing for smoother transactions, better user experience, and improved scalability. Unlike other exchange platforms, StableSwap doesn't require specific pairs of tokens for trading. This means users can trade any token for any other token, making it more flexible and accessible. 

At the heart of StableSwap's design is the principle of asset liability management (ALM). This means that deposits made by LPs are recorded as a liability for the platform. LPs receive LP tokens representing the exact amount and type of token they deposited into the liquidity pool. 

This ensures that when LPs withdraw their tokens, they receive precisely the same amount of tokens they deposited, along with any rewards earned. 

ALM also enables each token to grow naturally based on its demand and supply, unlike most other AMMs that require all tokens to have the same level of liquidity, which can hinder the growth of less popular tokens. 

This design gives StableSwap a reliable metric for tracking its financial health, lending out idle assets, and eliminating impermanent loss. Overall, StableSwap provides a more reliable, efficient, and user-friendly way of exchanging cryptocurrencies. 

## Platypus Finance functions and pricing  

The core function of the Platypus protocol is StableSwap. This system is designed to facilitate the exchange of stablecoins pegged to the US dollar, enabling users to swap tokens easily and with minimal barriers. It aims to reduce the impact of high-value trades by minimizing friction and lowering slippage during the exchange process. Each StableSwap transaction requires a 0.01% liquidity provision fee and $AVAX for gas fees. 

## Platypus Finance price 

 ![platypus finance to GBP chart](https://s3.eu-west-2.amazonaws.com/prod-monitalks-media/Screenshot_2023_04_18_at_11_03_19_4e38dce329.png)

Currently, Platypus sits at £0.06 with a [market cap](https://coinmarketcap.com/currencies/platypus-finance/ptp/gbp/) of £2,550,619. PTP is on an upward trend after a drop at the end of March. It has a circulating supply of 41,436,585 and a fully diluted market cap of £18,467,806. 


Latest Moni

The latest AMM news

Read the latest AMM news at Moni Talks

Trader Joe XYZ launches new AMM Liquidity Book

Platypus Finance: All You Need to Know