Liquidity Book is Live on Merchant Moe
Featuring the newest V2.2 version of LB built for Hooks, Merchant Moe is bringing a new era of zero-slippage swaps and flexible liquidity management to Mantle.
Merchant Moe began his journey onto Mantle Network with one mission — to become the cornerstone liquidity hub of the ecosystem. From growing deep liquidity with $MOE farms to building a strong community of loyal journeymen, every move thus far has been made in alignment with this mission. Now it’s time for the next big move.
Introducing Liquidity Book — a monumental step forward in Moe’s Journey
Liquidity Book (LB) is a concentrated liquidity protocol, built by Trader Joe. With a proven history of delivering unparalleled levels of capital efficiency, the Liquidity Book protocol is set to revolutionize the trading experience on Mantle Network.
Designed to solve many of the key problems presented by Classic AMMs and other Concentrated Liquidity protocols, the experience of providing liquidity with LB is completely unique, and gives users a feeling of limitless potential whilst managing their assets.
Featuring the brand new and purpose-built Version 2.2 of the Liquidity Book protocol, Merchant Moe will also be equipped with the very first hook ever built on LB — Concentrated Incentives. With Liquidity Book in hand, Merchant Moe is ready to bring the power of Concentrated Liquidity to the masses of Mantle Network.
How Does Liquidity Book Work?
The simplest way to conceptualize concentrated liquidity with Liquidity Book is to think of it as… well, a book.
An Analogy
📘 You can imagine adding liquidity to LB like adding words to the pages of a book. In this analogy, think of the market as the reader of this book and Liquidity providers as the writers of this book.As a writer, you earn fees when the reader reads your words. Rather than spreading your words from cover to cover like in most books, LB lets you write your words on only the pages you wish to be read from. At any given time, the reader can only read from one page, so as a writer, you must strategically place your words on the page numbers that fit your strategy. The more often a reader reads your words, the more you earn from fees. By concentrating your words onto less pages, you’re able to generate fee’s much more efficiently than in the classic cover-to-cover model.
Now let’s take the analogy a step deeper. You have two types of words as a writer — READ and UNREAD. Every word you place before the current page of the reader has already been READ. Every word you place after is UNREAD. As the reader moves forward in the book, your words will be swapped from UNREAD to READ, and the opposite will happen if the reader moves backwards in the book. The only page in the book that can have a mix of both types of words, is the page the reader is currently on.
As the readers habits change, you may need to adjust your strategy. Luckily, with LB you can always erase your words from one page and place them on a new page with full flexibility and complete control. This is the magic of Liquidity Book.
Breaking down the Analogy
Now with this understanding, let’s see how Liquidity Book really works.
LB divides liquidity into bins (pages), with each bin set at a specific price point (page number). The active bin (current page) will be the current price as determined by the market (the reader).
As a liquidity provider, you can provide liquidity with the two assets that make up a pool. Let’s use $mETH - $USDC as an example.
The active bin is the currently traded price of $mETH, which at time of writing, is $3600. The active bin will hold both tokens, allowing traders to swap between them with zero slippage. All bins to the left (green) contain only $USDC and all bins to the right (purple) contain only $mETH.
As the market price of $mETH increases, all of the $mETH in the active bin will be bought up and the active bin will move to the next bin over, leaving the previously active bin with only USDC. If the market price decreases, this same thing will happen in reverse.
As a Liquidity Provider, you will have full customizability and flexibility to distribute your liquidity to best match your strategy. Like putting words on a pages of a book, you choose the amount of liquidity to place in each bin and strategizing to maximize your earning potential.
Key Features of Liquidity Book
Liquidity Book takes a groundbreaking approach to liquidity management, empowering both traders and liquidity providers with unparalleled capital efficiency.
Best Rates for Traders ➡️ Unique bin system offers lower price impact and zero-slippage execution as long as there is sufficient liquidity within the active bin.
Fungible Liquidity ➡️ Liquidity tokens are fungible within each bins, giving users the power to easily hyper-manage positions, adjust strategies on the fly, and maximize returns.
Dynamic fees ➡️ Variable fee adjusts in volatile conditions to generate more fees, mitigating the impact of IL/LVR for Liquidity Providers. Greater capital efficiency enables LPs to risk less capital and earn more fees
Liquidity Shapes ➡️ Bin architecture enables the deployment of liquidity shapes, allowing for unique strategies to be deployed. Liquidity deployment is fully customizable and hyper-flexible
Concentrated Incentives
Merchant Moe will be introducing the very first hook built on top of LB — Concentrated Incentives. Purpose-built for Merchant Moe and Mantle Network, Concentrated incentives is a highly efficient reward mechanism offering targeted incentives to liquidity in the bins around the active price. These targeted incentives correspond to a pool-specific range of bins with the current active bin as the reference. Rewards are distributed to bins pro rata to their liquidity, meaning if one bin has twice as much liquidity as the other bins; it will receive twice as many rewards.
Adapting to price movements in real-time, these incentivized ranges enhance liquidity depth at current market prices and ensure the best rates are available to traders. With better pricing, LB will begin to bring in increased volume and drive higher fee-earning for LPs. This will activate a powerful TVL and Volume flywheel, further cementing Merchant Moe as the cornerstone liquidity hub for all ecosystem tokens.
Concentrated Incentives seamlessly plug into Merchant Moe’s current system of Pools, Farming, and Voting. The veMOE voting system will allow MOE stakers to boost the share of MOE rewards distributed to LB pools, and rewards will flow directly to liquidity in the incentivized range. Liquidity provided in LB pools will not require users to stake their LP tokens to farm rewards. $MOE rewards will automatically accrue when liquidity is in range and the rewards be claimable at any time.
Concentrated Incentives will go live in the coming days.
Liquidity Book: The Future of Trading
As Merchant Moe brings Liquidity Book to Mantle Network, a revolutionary new chapter for decentralized trading begins for the ecosystem. Liquidity Book's introduction marks the next step in Moe’s journey, transforming Merchant Moe into THE cornerstone liquidity hub. With its innovative approach to managing liquidity, Liquidity Book empowers both traders and liquidity providers like never before. Join Moe in the most exciting chapter of his journey yet and experience the power of Liquidity Book.
About Merchant Moe
Merchant Moe is the cornerstone DEX for Mantle Network. A trader's oasis in the bustling worlds of DeFi, Merchant Moe offers seamless trading, discretized liquidity, and real yield all within his intuitive and easy-to-navigate platform.