Impossible Finance, a DeFi incubator, launchpad and swap platform, now offers advanced features to make the automated market maker protocol much more attractive for swap users through competitive slippage rates and fees.
Impossible Finance described the new “v2 swap design” as a big step forward, citing the increased flexibility it provides for market makers in how they provide liquidity into the protocol.
The company touted the most significant improvement as a novel bonding curve called “xybk invariant,” which essentially achieves an artificial inflation of Total Value Locked (TVL) in pools by a multiplier of boost times.
“For example, when x=token0balance=100, y=token1balance=100, boost=10, the pool has underlying assets of (100, 100), but exhibits the same swap slippage as a (1000, 1000) v2 uniswap pool,” Impossible Finance further explains.
Liquidity providers can operate with up to 4000x capital efficiency, earning higher returns on their capital, the blog post added. This can be triggered through a new feature called ‘asymmetrical tuning,’ which provides different capital efficiencies for each side of the invariant curve.
According to Impossible Finance, its new liquidity mechanism offers enhanced capital efficiency for stablecoins with 24/7 trustless redemption for $1. Specifically, Impossible Finance might choose to provide 1000x capital efficiency when the peg breaks downwards and 50x capital efficiency when this factor breaks upwards.
The V2 upgrade reduces high gas fees
The enhancement also paves the way for low slippage trade execution while addressing the issue of Ethereum gas fees that have recently skyrocketed. The record transaction costs on the major blockchain have caused non-whale users to be slowly priced-out of DeFi because fees are eliminating their profits. In addition, many non-yield generating applications such as crypto-based gaming applications are becoming unusable on Ethereum Layer 1.
The new swap interface also aims to provide people lending funds to a pool with better passive portfolio management through the governance’s ability to precisely manage risk/reward based on market conditions.
Impossible Finance and other alternatives have emerged and are taking liquidity away from major DEXs, like UniSwap. Their innovative liquidity mechanism, better execution, and superior infrastructure are making it a point to remain relevant in the space.
Impossible Finance has recently raised over $7 million in new investment in a bid to become “the Y Combinator of DeFi. The seed round was co-led by True Ventures, CMS Holdings, Alameda Research, and Hashed. Over 125 institutional and angel investors have participated in the latest financing round to redefine “launching” with the Impossible Decentralized Incubator Access (IDIA) token.
With fresh capital in hand, Impossible Finance will continue building a multi-chain ecosystem for promoting the growth of DeFi liquidity and composability. Starting on Binance Smart Chain, the powerful protocol has plans to go multi-chain by expanding onto Ethereum and Polygon, with more deployments scheduled on future L2 solutions and other platforms.