Outrun AMM
Outrun AMM is built on classic AMM and includes several innovative improvements. The main features are as follows:
Capture Native Yield (Blast L2 Only): On Blast L2, the Outrun AMM introduces orETH(SY) and orUSD(SY) as wrapper tokens for Blast ETH and USDB in trading pairs. This design allows OutStake to capture the native yield generated by the Outrun AMM, enhancing the native yield accumulated by OutStake.
Separation of Liquidity and Market-Making Fees: Outrun AMM improves the management of market-making fees by separating liquidity from fee collection. This allows users to collect fees without removing liquidity, providing greater flexibility and convenience for liquidity providers.
New Fee Tiers: All classic AMM pools have a fixed swap fee of 0.3%, which results in a lack of flexibility for LPs (liquidity providers) who cannot seek different fee structures based on the assets they provide to the exchange. Outrun AMM will introduce new fee tiers for pool creators, allowing them to build different trading pools for various types of assets when launching pools on Outrun AMM.
Referral Commission Engine: Outrun AMM is currently the only automated market maker on the market integrated with a referral commission engine. We have redesigned the underlying code and opened the referral commission engine to everyone, thereby increasing the composability of the protocol. The rewards for the referral bonus come from the protocol fees and do not harm the interests of LPs. At the same time, this attracts more transactions, bringing higher income to LPs.
Why build on classic AMM instead of concentrated liquidity AMM?
We analyzed the historical trading data of most concentrated liquidity AMMs on the market and found the following issues.
Liquidity Concentration in Major Trading Pairs
Major and stablecoin trading pairs attract the majority of trading volume and liquidity due to their high liquidity, low volatility, and high market demand.
The liquidity for these pairs is often provided by professional market makers who have significant capital and professional position management capabilities.
Not favorable for non-professional market makers
In concentrated liquidity AMMs, providing liquidity becomes more complex and requires professional knowledge to manage positions and price ranges. This high level of uncertainty makes it difficult for ordinary users to participate.
The liquidity provision curve in concentrated liquidity AMMs is not smooth and often faces the issue of unbalanced liquidity, leading to higher impermanent loss for liquidity providers (LPs), where losses can outweigh gains.
The dominance of professional market makers in providing liquidity reduces the level of decentralization, making it increasingly difficult for ordinary users to participate, thus blurring the lines between CEX and DEX.
Unfriendly to New DEX Protocols and Long Tail Assets
Concentrated liquidity AMMs have high market-making thresholds, and new protocols lack a large number of mainstream assets, making it difficult to accumulate Total Value Locked (TVL) for the protocol.
Long tail assets face the problem of liquidity fragmentation on centralized liquidity AMMs. Long tail assets often experience significant volatility, making it difficult to determine upper and lower price boundaries. This volatility can lead to sudden liquidity collapses, negatively impacting the project.
Therefore, the initial version of Outswap—Outrun AMM, is built based on the design philosophy of classic AMM. Only after Outrun AMM has gained sufficient liquidity will we launch the concentrated liquidity AMM version—Outrun DLAMM.
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