Multi Stable Pools

Overview

Multi Stable Pools are designed for assets that are either expected to consistently swap at near parity, or at a known exchange rate. Multi Stable Pools use Stable Math (based on StableSwap, popularized by Curve) which allows for swaps of significant size before encountering substantial price impact, vastly increasing capital efficiency for like-kind and correlated-kind swaps.

Trading Use Cases

• Pegged Tokens - tokens that swap near 1:1, such as two stablecoins of the same currency (eg: DAI, USDC, USDT), or synthetic assets (eg: renBTC, sBTC, WBTC)

• Correlated Tokens - tokens that swap near 1: with some slowly changing exchange rate , like derivatives (eg: wstETH, wETH)

Multi Stable

A Multi Stable Pool allows swaps to and from its own LP token. Putting its LP token into other pools (or "nesting") allows easy routing between nested pool tokens and tokens in external pools.

Example

With a MultiStablePool [DAI, USDC, USDT], we can directly pair the LP token, against WETH in a WeightedPool[WETH, CSP-BPT]. This nesting allows us to consolidate liquidity into some of the most common groupings, which results in deeper liquidity and better prices throughout BurrBear. In this example, it also saves you the trouble of making 3 WeightedPools [WETH, DAI], [WETH, USDC], [WETH, USDT].

Pre-minting

These pools mint an effectively infinite amount of their LP tokens at the time of pool creation. This help reduce gas costs because instead of using the mint/burn mechanism to join a pool, it uses a transfer on a join/exit, which is more efficient.

Use Cases

wstETH/WETH Liquidity Pools in DeFi

Lido is a liquid staking solution for ETH 2.0 backed by industry-leading staking providers. Lido lets users stake their ETH - without locking assets or maintaining their own infrastructure. The goal is to solve problems associated with initial ETH 2.0 staking: illiquidity, immovability and accessibility by making staked ETH liquid and allowing for participation with any amount of ETH to improve the security of the Ethereum network.

stETH is a token that represents Staked Ether, combining the value of deposited ETH with staking returns. As an ERC20, stETH tokens can be swapped as one would swap WETH, allowing the benefits of ETH 2.0 staking while allowing users to continue using their staked Ether on decentralized finance products.

Stable Pools are ideal for the wstETH-WETH pair as the stETH asset is highly correlated but not pegged 1:1 to ETH as it accrues staking returns.