Partnered With:

What's different about Sushiswap's new AMM protocol, Trident?

Read this article in 10 Minutes

Title: Trident: Sushi's Trident

Originally written by Blue Fox Notes

In the previous Blue Fox Notes article, it was mentioned several times that the next step for Defi is to focus on improving asset efficiency. This trend can be seen from the iterations of several protocols such as Uniswap and Curve.

Sushiswap has announced the launch of its Trident programme, which is expected to be launched in the next few weeks but the timing is undetermined. The Trident programme is also essentially focused on capital efficiency. Trident, which means "Trident" in Chinese, proposes three formulas for improving capital efficiency. So what are the three elements of Sushiswap's trident?

Build Trident&NBSP based on Bentobox;

In simple terms, Bentobox is a vault of money, a place to gather money, and a revenue aggregation protocol. Users can deposit their token assets into Bentobox and receive a variety of passive benefits. Developers can also build their own Defi protocol based on Bentobox, such as the Kashi Lending Protocol built on Bentobox.

Through asset aggregation, it can help users save money and reduce management effort. For example, when a user deposits a Sushi token into the Bentobox vault, in addition to the gas charge for the deposit and withdrawal, the rest is managed by the contract, which can earn a pledge fee or other revenue from the contract. For Bentobox, check out Blue Fox Notes' previous article, "The Nature of the Sushi vs. Uni Debate."

Trident will also be built on Bentobox, which means that when users deposit their tokens into Bentobox, the pool will earn more for their assets based on various strategies. For example, when their token assets are not used for liquidity, there are other strategies to gain income.

Since Sushiswap's liquidity will go to Bentobox, which means up to $2 billion of future capital pool assets, Sushiswap is not only a DEX, but also a revenue aggregator.

Diversified pools of liquidity

For now, Sushi is using the most basic 50/50 liquidity pool, while Trident is trying to meet the diverse needs of its users by building multiple pools, in addition to the traditional constant product model, adding mixed pools, concentrated pools, and weighted pools.

* mixing pool

Mixed pools allow users to exchange some of the same assets (such as USDC, USDT, BUSD; WBTC, RENBTC, etc.) to reduce the sliding point of exchange. The mixed pool can contain up to 32 token assets. Since they are all similar assets, these assets can be traded in a pool for a better trading experience. LPs that provide liquidity to the mixing pool receive NFT tokens, not ERC20 LP tokens.

* Concentrated pools of liquidity

In the case of centralized liquidity pools, previously designed and practiced by Uniswap and Curve, users can provide a custom exchange rate band for their liquidity. See the article "Iteration of Curves: Line to Planes."

Centralized liquidity pools give liquidity providers more freedom and can achieve higher capital efficiency through personalized Settings. In the previous LP pool, the fee income obtained by LP was related to the share ratio and investment time in the pool, while the concentrated liquidity could obtain higher market making income according to the strategy. Of course, there are also greater risks.

(Screenshot of the design interface for providing liquidity to a centralized flow pool, source: Sushiswap)

In addition, Trident will adopt a "mobile first" strategy that prioritises the mobile user experience.

* weighted pool

The difference between a weighted pool and a traditional 50/50 ratio pool is that it can support multiple assets and you can customize the ratio of assets in the pool, such as 60/40 ratio. This is similar to Balancer's model. Trident will be able to support up to eight tokens at a time.

As a simple example, we currently provide liquidity to the Sushi pool, where a user provides $1000 of liquidity and needs to inject $500 worth of Sushi tokens and $500 worth of ETH tokens. In the weighted pool, users can inject $400 of Sushi tokens and $600 of ETH tokens.

(Screenshot of the design interface for providing fluidity to the weighted pool, source: Sushiswap)

In general, the above liquidity pools are more of a collection of previous design concepts and practices of other DEX to meet the needs of more diverse users.

Tines is its routing engine

Tines is a new routing engine designed by Sushiswap for the front end, which is a multi-hop, multi-route conversion router. It can query the various pool types described above and provide the best pricing solution based on gas costs, price slippages, graphical topologies, and other factors.

Multi-hop here means that you can exchange between multiple pools to achieve the best price; Multi-routing refers to the ability to allocate transactions horizontally, reducing the slippage point. In short, the heart of the Tines routing engine is to help traders achieve the best exchange price.

In the end, Sushiswap will continue to support open source.

(Sushiswap supports open source, from Sushiswap developer Joesph DeLong)

It's more about integration and landing

In terms of design concept, Bentobox has its own characteristics, whether it is weighting pool, mixing pool, centralized liquidity pool, routing engine, etc., similar concept can be seen in other previous protocols. With the landing of Trident, we may see an AMM that includes a variety of concepts and practices. It can be seen that the Sushiswap team is better at integration and practice. How much of an impact it will have on Sushiswap should be seen soon.