🏖️Liquidity Pools (LPs)

Beam primarily features concentrated liquidity pools for maximum capital efficiency.

Beam concentrated liquidiy pools utilize a fork of Algebra Integral concentrated liquidity pools, featuring dynamic fees that adjust to market volume, minimizing slippage for traders and maximizing profitability for liquidity providers and the protocol, regardless of market conditions.

What is concentrated liquidity (CL)? Concentrated liquidity plays a crucial role in enhancing the efficiency of swaps in several key ways.

By pooling together a significant amount of liquidity in a concentrated manner, swaps benefit from increased market depth and tighter spreads. This enables participants to execute their trades at more favorable prices and reduces the potential slippage costs.

Concentrated liquidity fosters a higher level of price stability and minimizes the impact of market fluctuations. With a robust pool of liquidity, it becomes easier to absorb large orders without causing substantial price movements. This stability provides traders with greater confidence in executing swaps, as they can anticipate more predictable outcomes. CL also improves the chances of aggregators routing through Beam, increasing trade volume.

Ultimately, the efficiency derived from concentrated liquidity not only benefits individual traders but also contributes to a healthier and more vibrant swaps market overall, generating more organic fees for veBEAM voters.

What are Algebra Integral concentrated liquidity pools? An innovative AMM codebase, splitting the previously monolithic DEX setup into the immutable Core & tailored Plugins to create customizable Concentrated Liquidity pools. This modular design future-proofs Beam by allowing the freedom to add custom plugins to our liquidity pools as Beam's ecosystem and needs evolve.

For right now, the primary advantage of Algebra Integral pools are their dynamic fees. Our Algebra pools constantly calculate the optimal fee depending on risks, volatility of assets, trading & pool volumes, and other factors. This results in the right balance between traders & liquidity providers experience at all times, in all market conditions, while maximizing profit for all.