Understanding Liquidity Pools in Goblins Cash V2

The core functionality of Goblins Cash V2 is to allow users to exchange tokens in a secure way, with low fees and low slippage.

Slippage is the difference between the current market price of a token and the price at which the actual exchange/swap is executed…

To provide access to the best rates on the market, Goblins Cash V2 utilizes different types of tokens:

• Correlated tokens: Assets expected to trade closely in price (e.g., stablecoins like $USDC, $DAI).
• Uncorrelated tokens: Assets whose prices are not expected to move closely (e.g., $GOB, $BTC).

Goblins Cash V2 offers different liquidity pool types… primarily Stable Pools and Volatile Pools…

The protocol’s router evaluates pool types… uses time-weighted average prices (TWAPs)…

The deeper the liquidity… the smaller the slippage…

Pool Types:

Stable Pools: Designed for tokens with little to no volatility relative to each other. Common formula: x³y + y³x ≥ k

Volatile Pools: Designed for tokens with higher price volatility. Common formula: x × y ≥ k

Concentrated Liquidity (CL) Pools: Allow LPs to deposit assets within a specific price range… using “ticks”…

• Tick Spacing: Minimum price movement between ranges. Examples: Stable tokens (0.01%-0.5%), Volatile tokens (2%+).
• CL Pool Symbols: Often indicate nature, e.g., CL1-wstETH/WETH.
• CL Pool Fees: Can be adjusted flexibly.

Understanding Rewards & APR Calculation in Goblins Cash V2

Providing liquidity… can earn rewards from transaction fees and potential token incentives (emissions).

Calculating APRs (Annual Percentage Rate):

For Basic Pools: APR generally based on rewards earned / total value of staked liquidity.

For Concentrated Liquidity (CL) Pools: APR calculation is nuanced, considering rewards for liquidity in the active trading price range.