xGov prop. 163 - Biatec AMM - Milestone 3

Governance xGov Proposals
1

id: 163
period: 3
title: Biatec AMM - Milestone 3
author: Ludovit Scholtz (@scholtz)
discussions-to: xGov 163: Biatec AMM - Milestone 3 by scholtz · Pull Request #163 · algorandfoundation/xGov · GitHub
company_name: Scholtz & Co
category: dApps
focus_area: Defi
open_source: Yes
amount_requested: 200000
status: Final

Abstract

Biatec AMM has recevied xGov grant #80 and is in process of creating concentrated liqudity AMM. This proposal requests funds for milestone 3 - Integration to DEX aggregator. Check our progress - dex.biatec.io.

We will improve Algorand’s DeFi ecosystem and with concentrated liquidity AMM we will give users better swap quotes and liquidity providers better yields in comparision with using traditional AMMs.

This grant proposal aims to advance the development and open source implementation of Automated Market Makers (AMMs) with concentrated liquidity. AMMs have emerged as a crucial component of decentralized finance (DeFi), providing efficient and decentralized mechanisms for trading digital assets. However, traditional AMMs suffer from certain limitations, such as inefficient capital utilization and vulnerability to impermanent loss.

Concentrated liquidity models address these issues by allowing liquidity providers (LPs) to concentrate their funds within specific price ranges, thereby enhancing capital efficiency and reducing the risk of impermanent loss. This proposal seeks funding to support research, development, and implementation efforts focused on creating open source algorand AMM smart contract.

By supporting this grant proposal, you will contribute to the advancement of decentralized finance by addressing the limitations of traditional AMMs and enhancing capital efficiency and risk management through the implementation of concentrated liquidity models. This research and development effort will foster innovation, attract liquidity providers, and improve the overall user experience in the rapidly evolving Algorand DeFi ecosystem.

Team

Scholtz - Product owner. Active on Algorand forum, runs a few projects in Algorand ecosystem such as the VoteCoin, A-Wallet, Aramid Bridge, Stabilitas, ASA.Gold. Has been winner in few hackathons, such as Algorand encode hack 2021, EUvsVirus, Swiss blockchain hackathon 2021, Bitcoin bankathon, Encode DAO hack, Algo HackJam, Greenhouse hack III, Mega Ace Hackathon, …

Experience with Algorand

Scholtz & Co is relay node runner.

We provide many open source tools to help algorand communities - scholtz (scholtz) / Repositories · GitHub

Everyday Algonaut channel

Present Proposal

We will build Open source concentrated liqudity AMM integrated to at least one of the Algorand’s DEX aggregotors.

With concentrated liquidity people get better swapping quotes, and liquidity providers will get higher returns on their investments.

Roadmap

We will work using LeSS principles, with 2w sprints & product increments.

Estimated project delivery is 3 months from the project funding.

Milestone 1 - Project approved (prepayment)

Date: T
Amount: 100000 ALGO

Description: We require half of the funds to be prepaid, so that we can pay salaries for developers

Milestone 2 - Smart contract delivery

Date: T + 3 months
Amount: 200000 ALGO

Milestone 3 - Integration to DEX aggregator

Date: T + 6 months
Amount: 200000 ALGO

Milestone 4 - Audits (not in scope of current grant round)

Date: T + 18 months
Amount: TBE

Description: We will deliver smart contract and web with abilities to open new lp pool with concentrated liquidity, do swaps and manage the liqudity

Community

Please join our discord at OpenAMM

White Paper

https://cloudflare-ipfs.com/ipfs/QmagzMhx2dqgAH9YePwx2UhgnMdvNG3whauLZriUunufTH

Video presentation

Benefits for the community

The Algorand community stands to benefit significantly from the development and implementation of an open-source Automated Market Maker (AMM) with concentrated liquidity. Here are some key benefits that such a project can bring to the Algorand ecosystem:

  • Enhanced Liquidity Efficiency: AMMs with concentrated liquidity allow liquidity providers (LPs) to optimize their capital utilization by concentrating funds within specific price ranges. This concentration leads to increased liquidity depth and reduced slippage, ultimately improving the overall efficiency of the Algorand ecosystem. Traders will experience improved trade execution and reduced trading costs, attracting more participants to the platform.
  • Mitigation of Impermanent Loss: Impermanent loss is a common concern for liquidity providers in traditional AMMs. Concentrated liquidity models help mitigate this risk by allowing LPs to focus their funds on price ranges where they are more comfortable with the potential price volatility. This reduced exposure to impermanent loss makes liquidity provision more attractive and sustainable, incentivizing more LPs to participate in the Algorand ecosystem.
  • Diverse Investment Opportunities: The introduction of an open-source AMM with concentrated liquidity on Algorand will create new investment opportunities for LPs. By concentrating funds in specific price ranges, LPs can capitalize on market trends, volatility, and arbitrage opportunities. This flexibility encourages LPs to actively engage in liquidity provision and brings a wider range of investment strategies to the Algorand community.
  • Deeper DeFi Integration: The availability of an open-source AMM with concentrated liquidity will strengthen the DeFi ecosystem on Algorand. It will enable seamless integration with other DeFi protocols, such as lending platforms, decentralized exchanges, and yield farming protocols. This integration will enhance interoperability, allowing users to easily move their assets across various decentralized applications, thereby expanding the use cases and liquidity within the Algorand ecosystem.
  • Community-driven Development and Innovation: The open-source nature of the proposed AMM encourages community participation, collaboration, and innovation. It provides an opportunity for developers within the Algorand community to contribute to the project, propose improvements, and build additional features. This fosters a sense of ownership, transparency, and decentralization within the Algorand ecosystem, leading to a more vibrant and thriving community.
  • Attracting Liquidity Providers: The introduction of an AMM with concentrated liquidity on Algorand will attract liquidity providers from other blockchain ecosystems. LPs are always seeking platforms that offer capital-efficient and risk-mitigating solutions. By providing a robust and efficient concentrated liquidity AMM, Algorand can position itself as an attractive destination for LPs, driving liquidity inflow, and promoting the growth of the ecosystem.

In conclusion, the development of an open-source AMM with concentrated liquidity brings several benefits to the Algorand community. It enhances liquidity efficiency, mitigates impermanent loss, expands investment opportunities, strengthens DeFi integration, fosters community-driven development, and attracts liquidity providers. These benefits contribute to the growth, competitiveness, and resilience of the Algorand ecosystem, positioning it as a leading platform for decentralized finance.

Additional information

We seek to establish new legal entity for this project and comply with MiCA regulations.

This grant request does not include audits, however we are open to cooperate with any auditors on audits. We assume in next period we will request funding for audits.

We have created project discord - OpenAMM . Please sign in and lets have a chat.

2

Other links with discussion:

3

What is the plan for these 200 000 ALGOs? Will you build your own aggregator or is it going to go towards paying existing aggregators to implement it? How much would you guys at Aramid pocket for asking and paying someone to do it if so?

1 Like
4

how can we approve a milestone before the milestone before it has been delivered? to make sure: this would be paid out ONLY if milestone 2 was sucessful?

5

did you revisit your whole architecture or will it be still one person generates one pool and this one pool needs to be aggregated? sounds like it will be impossible to aggregate those pools on the AVM

6

I replied to same question at mega ama: Reddit - Dive into anything

Just little tweak to your post: Biatec AMM is not Aramid.

Also we have best communication with folks router, we will be happy if we cooperate together with you and implement it in vestige, and i have no information how is the dev process now in the deflex at the moment but will try to support them if this grant request is approved.

We are ready to build our own dex aggregator which will work directly onchain if no current aggregators will cooperate.

7

Give us time please. The session #2 contracts has been just signed recently and initial payment has not yet been received.

We plan to show up something before the xgov #3 session will end.

8

why rush it and not apply for the next round tho? something to show doesnt sound promising, i want a little bit more than that personally

1 Like
9

Surely you have to deliver milestone 2 before milestone 3 can go to a vote…?

2 Likes
10

Isn’t this post late to the forum? The “Review Phase” was meant to end Feb 5th. This proposal should not have been advanced to the voting phase.

1 Like
11

Surly we have to deliver milestone 1 before milestone 2 can start right? Milestone 1 has not yet been reached.

I submitted this proposal in favor of continuity of the proposal as a whole as it was suggested to split proposals to 3 months chunks so that it is processable better by the xgov voting system.

I expect the AF to confirm the deliverability of the milestone 2, and only after it is fully delivered the milestone 3 can be funded. Note that the processing time of the AF to sign and proceed to milestone 1 of the contract should not affect the decision to approve next round of funding by xgovs. Or that processing time should not take 3 months after voting session end but rather should start already within the voting session after it is known that the project will be approved. Like for example #145 should be already in the process to sign the contract.

12

why has this proposal even passed to voting? It wasn’t discussed here at all, wtf is this?!?!?

1 Like
13

Ludovit posted all his proposals to the forums yesterday. I don’t get why his stuff went to voting when he pulls a quick one like this. Really bad faith from his side. Now there’s no time to discuss anything of course…

2 Likes
14

Is there any rule that every project has to be discussed on the algorand forum?

We wrote the discussion link to our proposal and adri wrote there few days back that should discuss also here, so we did.

We discussed our proposals on the xgov reddit pages, in reddit mega ama, in github and now we are discusing it here.

Please stop sharing fud and focus on building.

15

you hijacked the reddit AMA too… you are single-handedly destroying xgov and making it look like a joke. I vote for ban

2 Likes
16

I vote to ban all users on algorand forum who are against the algorand builders

We need more builders like @scholtz is. Almost everything he does is open source.

1 Like
17

Who needs xgov when you have builders like @scholtz . You see builder and i see person purposefully sabotaging the process for second period in a row.

18

We need builders who build stuff that people actually use and Ludo failed at this for now with every dapp he built… you think that’s what we need, really? Just because someone is building on here doesn’t mean they are a saint that’s untouchable

2 Likes