MIMSwap

MIMSwap is an in house stableswap AMM for the Abracadabra ecosystem

Abracadabra launched an Automated Market Maker DEX (AMM DEX) called MIMSwap with its own liquidity needs as the first use case. MIMSwap specializes is the exchange of tightly pegged assets (like stablecoins).

To learn more about MIMSwap and the technical aspects of it, please refer to the Developer Documentation (coming soon).

Core Concepts

It's important for users to understand a few key concepts to better use MIMSwap and more broadly DEXes. These concepts will appear throughout your use of MIMSwap.

Lexicon - Terminology

DEX: a Decentralized EXchange (or DEX) is a suite of smart contracts that enable users to exchange assets without intermediaries.
Capital Efficiency: in DEXes, capital efficiency refers to the ability of a DEX to serve a high exchange volume with limited liquidity while limiting price movemrnts. The more volume can be served with limited liquidity, the more capital efficient.
Price Impact: Price impact refers to a shift in the expected price of a trade due to the size of it. The bigger the trade is, the higher the price impact.
Slippage: unlike price impact, slippage isn't caused by your trade, but by external factors happening between the time of submission and of execution of the trade. Slippage can be negative, resulting in a worse than expected price or positive. You can set your slippage tolerance to only allow a trade to happen if the negative slippage is less than a desired percentage.
Liquidity Provisioning: Providing liquidity is the action of supplying to the liquidity pool assets that will be used to execute the swaps of users. When doing this, you usually get an exposure to all the assets in the pool and earn trading fees and other incentives if applicable.
LP Tokens: after providing liquidity, most DEXes give you back LP Tokens. They are an IOU on the share of the pool. You can use them to redeem your share of the assets in the pool, but they can also be used as any other ERC20 tokens in DeFi.
Farming: While farming can take many forms, in the context of Liquidity Provisioning, farming is the action of locking up your LP tokens in a farm to receive further rewards. Some farms ask you to lock your tokens for a set durations to better align incentives.
Stable Pool: a stable pool is the type of liquidity pool used by MIMSwap. It specializes in the exchange of pegged assets, maximizing capital efficiency while minimizing price impact.

A note on liquidity provisioning: When providing liquidity to a DEX, you provide it at the current ratio of the pool (of the pool has 40% MIM and 60% USDT, you will provide 40 MIM and 60 USDT if you provide 100$). You will get back LP tokens corresponding to your share of the entire pool (assuming the pool has 1000$, you will receive 10%) When you withdraw from the pool, assuming the total liquidity hasn't change, you will receive 10% of the pool at the current rate of the pool, which may differ from the rate you provided at. This is the normal and expected behavior of a DEX. When LPing, you are exposed to every asset in the pool and to the ratio of said pool to evolve with market conditions.

Let's now explore the 2 main ways users will interact with MIMSwap.

PreviousMIM Beaming NextSwapping assets

Last updated 7 months ago

Core Concepts

It's important for users to understand a few key concepts to better use MIMSwap and more broadly DEXes. These concepts will appear throughout your use of MIMSwap.

Lexicon - Terminology

DEX: a Decentralized EXchange (or DEX) is a suite of smart contracts that enable users to exchange assets without intermediaries.
Capital Efficiency: in DEXes, capital efficiency refers to the ability of a DEX to serve a high exchange volume with limited liquidity while limiting price movemrnts. The more volume can be served with limited liquidity, the more capital efficient.
Price Impact: Price impact refers to a shift in the expected price of a trade due to the size of it. The bigger the trade is, the higher the price impact.
Slippage: unlike price impact, slippage isn't caused by your trade, but by external factors happening between the time of submission and of execution of the trade. Slippage can be negative, resulting in a worse than expected price or positive. You can set your slippage tolerance to only allow a trade to happen if the negative slippage is less than a desired percentage.
Liquidity Provisioning: Providing liquidity is the action of supplying to the liquidity pool assets that will be used to execute the swaps of users. When doing this, you usually get an exposure to all the assets in the pool and earn trading fees and other incentives if applicable.
LP Tokens: after providing liquidity, most DEXes give you back LP Tokens. They are an IOU on the share of the pool. You can use them to redeem your share of the assets in the pool, but they can also be used as any other ERC20 tokens in DeFi.
Farming: While farming can take many forms, in the context of Liquidity Provisioning, farming is the action of locking up your LP tokens in a farm to receive further rewards. Some farms ask you to lock your tokens for a set durations to better align incentives.
Stable Pool: a stable pool is the type of liquidity pool used by MIMSwap. It specializes in the exchange of pegged assets, maximizing capital efficiency while minimizing price impact.

Let's now explore the 2 main ways users will interact with MIMSwap.