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The automated market maker (AMM) model championed by the Uniswap (UNI) decentralized exchange (DEX) back in 2018 changed the entire landscape of the decentralized finance (DeFi) industry. Thanks to the AMM-based setup, liquidity levels on DEXs have risen sharply, and the efficiency of coin swaps has skyrocketed. Nevertheless, crypto trading using AMM pools has its drawbacks, along with the numerous benefits this model has ushered in.
Among the main cons of AMM DEXs is the short-term approach adopted by many liquidity providers (LPs) and token issuers. Since AMM DEXs pay out LP rewards denominated in the tokens of the pool, many LPs are eager to quickly withdraw their liquidity and sell the tokens at the first sign of volatility. This is understandable, as many of these tokens are highly volatile and may crash and burn quickly, falling victim to the powerful forces driving the crypto market. The same risk of pool assets becoming worthless often drives token issuers to withdraw liquidity and support for their tokens as well. In addition, another drawback of AMMs is the lack of meaningful long-term incentives provided to LPs and token creators.
Ethervista (VISTA) is a new DEX platform that aims to resolve the inherent deficiencies of the AMM trading model. The platform pays out LP rewards in ETH, and distributes the rewards after accumulating them in a dedicated pool so that LPs and token issuers are incentivized by genuine, long-term trading activity in swap pools, rather than by the short-term price movements of tokens in these pools.
Key Takeaways:
Ethervista (VISTA) is an innovative DEX platform that rewards LPs and token creators in ETH, rather than in volatile ERC-20 tokens, and provides a high level of customizability for its liquidity pools.
The platform uses a mathematical model, the Euler sequence model, to calculate and distribute rewards to LPs and token creators fairly, commensurate with their long-term contribution.
Ethervista's native crypto, VISTA, is a deflationary asset with a built-in burn mechanism designed to boost the token's value over time.