💦 Pools
AstroSwap Pools are the foundation of liquidity on X Layer. Users deposit two assets into a pool to enable trading, while earning a proportional share of the fees generated. Pools are implemented using a V3 concentrated liquidity model, which significantly improves capital efficiency compared to legacy AMMs.
Key Characteristics
Concentrated Liquidity
Liquidity providers (LPs) allocate funds within specific price ranges rather than across the entire curve. This allows tighter spreads, higher fee capture, and more efficient use of capital.
Multiple Fee Tiers
Each trading pair can support several fee tiers (e.g. 0.01%, 0.05%, 0.3%, 1%). Low-volatility pairs such as stablecoins benefit from narrow fees, while volatile assets require higher tiers to compensate LPs.
Position as NFT
Each liquidity position is represented as a non-fungible token (NFT), recording the pair, fee tier, range, and accrued fees. Positions are transferable and fully on-chain.
Flexible Strategies
LPs can choose wide ranges for stability or narrow ranges for higher yield, and may adjust positions dynamically in response to market conditions.
Earnings
LPs earn fees proportional to the share of liquidity provided within the active price range.
Fees accrue continuously and can be collected at any time.
Compounding strategies—reinvesting fees into the same or new ranges—can enhance returns.
Risks
Out-of-Range Exposure: If the market price moves outside the selected range, liquidity is converted into a single asset and stops earning fees until repositioned.
Impermanent Loss: Changes in relative asset prices may reduce returns compared to holding.
Market Volatility: Narrow ranges require more frequent adjustments to remain active.
AstroSwap Pools give liquidity providers precise control over how their capital is deployed. By concentrating liquidity in chosen ranges and selecting appropriate fee tiers, LPs can achieve higher capital efficiency and more competitive fee income, while traders benefit from deeper liquidity and tighter execution.
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