Introduction

The LOVELY V3 Swap protocol is a peer-to-peer1 system designed for exchanging cryptocurrencies (BEP-20 Tokens) on the Binance Smart blockchain. The protocol is implemented as a set of persistent, non-upgradable smart contracts; designed to prioritize censorship resistance, security, self-custody, and to function without any trusted intermediaries who may selectively restrict access.

LOVELY V3 Swap is open source with slight modifications, which are viewable here. Each version of LOVELY V3 Swap, once deployed, will function in perpetuity, with 100% uptime, provided the continued existence of the Binance Smart Chain.

To understand how the LOVELY V3 Swap protocol differs from a traditional exchange, it is helpful to first look at two subjects: how the Automated Market Maker design deviates from traditional central limit order book-based exchanges, and how permissionless systems depart from conventional permissioned systems.

Most publicly accessible markets use a central limit order book style of exchange, where buyers and sellers create orders organized by price level that are progressively filled as demand shifts. Anyone who has traded stocks through brokerage firms will be familiar with an order book system.

The LOVELY V3 Swap protocol takes a different approach, using an Automated Market Maker (AMM), sometimes referred to as a Constant Function Market Maker, in place of an order book.

At a very high level, an AMM replaces the buy and sell orders in an order book market with a liquidity pool of two assets, both valued relative to each other. As one asset is traded for the other, the relative prices of the two assets shift, and a new market rate for both is determined. In this dynamic, a buyer or seller trades directly with the pool, rather than with specific orders left by other parties. The advantages and disadvantages of Automated Market Makers versus their traditional order book counterparts are under active research by a growing number of parties. We have collected some notable examples on our research page.

Permissionless Systems

The second departure from traditional markets is the permissionless design of the LOVELY V3 Swap protocol. Permissionless design means that the protocol’s services are entirely open for public use, with no ability to selectively restrict who can or cannot use them. Anyone can swap, provide liquidity, or create new markets at will. This is a departure from traditional financial services, which typically restrict access based on geography, wealth status, and age.

SWAP FEE

Swap fees are distributed pro-rata to all in-range liquidity at the time of the swap. If the spot price moves out of a position’s range, the given liquidity is no longer active and does not generate any fees. If the spot price reverses and re-enters the position’s range, the position’s liquidity becomes active again and will generate fees.

Swap fees are not automatically reinvested as they were in V2 Swap. Instead, they are collected separately from the pool and must be manually redeemed when the owner wishes to collect their fees.

Pool Fees Tiers

LOVELY V3 Swap introduces multiple pools for each token pair, each with a different swapping fee. Liquidity providers may initially create pools at three fee levels: 0.05%, 0.30%, and 1%.

Breaking pairs into separate pools was previously untenable due to the issue of liquidity fragmentation. Any incentive alignments achieved by more fee optionality invariably resulted in a net loss to traders, due to lower pairwise liquidity and the resulting increase in price impact upon swapping.

The introduction of concentrated liquidity decouples total liquidity from price impact. With price impact concerns out of the way, breaking pairs into multiple pools becomes a feasible approach to improving the functionality of a pool for assets previously underserved by the 0.30% swap fee.

Finding The Right Pool Fee

We anticipate that certain types of assets will gravitate towards specific fee tiers, based on where the incentives for both swappers and liquidity providers come nearest to alignment.

We expect low volatility assets (stable coins) will likely congregate in the lowest fee tier, as the price risk for liquidity providers holding these assets is very low, and those swapping will be motivated to pursue an execution price closest to 1:1 as they can get.

Similarly, we anticipate more exotic assets, or those traded rarely, will naturally gravitate towards a higher fee — as liquidity providers will be motivated to offset the cost risk of holding these assets for the duration of their position.

ABOUT LOVELY SWAP TOKEN ($LST)

$LST is the native utility token of the lovely swap ecosystem. The token is Bep20 standard, and it will play a major role in the ecosystem. Once you have this token, users will have more access to all the facilities and benefits of the ecosystem, almost all rewards on this platform are paid in $LST; Majorly, the double rewards in the Sood Farms and Pools sections will pay out in LST tokens. And the token can be staked and farmed, and The token is listed and tradable on Bitmart with the team aiming to list it on bigger exchanges.

TOKEN INFO

Token Name: LOVELY SWAP TOKEN
Token Symbol: LST
Total Supply: 300,000,000 LST
Token Type: BEP20

LST TOKEN ALLOCATION CHART

CONCLUSION

This is a fairly potential project for large investors when having to pay a relatively small fee to trade, Lovely V3 Swap will become a great choice for users to experience in practice. What are you waiting for, let's experience it with me right now.

Useful Links

Official Website: https://v3.lovely.finance/
Whitepaper: https://v3.lovely.finance/img/V3-swap-white-paper.pdf
Explorer: https://bscscan.com/token/0x019992270e95b800671d3bc1d763E07e489687B2
Twitter: https://twitter.com/v3swap
Telegram: https://t.me/lovelyv3swap
Author Details

BitcoinTalk Username:hertryshin

BitcoinTalk Url: https://bitcointalk.org/index.php?action=profile;u=3411168

BSC wallet : 0xA3b29316CD583e6a9AcA9E3bD92148e79dC2B948