Ⓜ️Longtail AMM Specs

The first AMM that pays you to use it.

If you want to build or use the Longtail AMM, learn more about it here 🐈

The Longtail AMM is a V3 DEX that follows the concentrated liquidity curve introduced by Uniswap:

$$\left(x_r+\frac{L}{\sqrt{p_b}}\right)(y_r+L\sqrt{p_a})=L^2$$

where x_r and y_r are the real reserves of two assets X and Y of an LPs position, and L is the amount of liquidity provided in the price range [p_a, p_b]. Concentrated liquidity positions will be translated into bids and asks on the order-book according to the liquidity curve.

This model results in a greater capital and trading efficiency due to tighter ranges around the spot price with outside virtual reserves instead of a price range of (0, ∞), where most of the liquidity will never be touched. As a result of this, positions on very small ranges already act similarly to limit orders. Because of this, concentrated liquidity positions are a natural first step to building on-chain order books from AMMs.

Native Utility Mining

Every pool on the Longtail AMM will be paired with a Super Asset, allowing for a native Utility Mining integration from the start. Having native Utility Mining allows the protocol to turn off LP and platform fees while still being able to hedge against LP losses and even provide better returns for LPs. Traders and LPs alike will receive higher yields for trading and making markets on Longtail.

Comparison of PnL for an LP position between Longtail and Camelot V3

Lowest Fees on Arbitrum due to Stylus

Longtail is built with Arbitrum Stylus, which allows for Rust powered smart contracts that are 10x less costly than Solidity. Rust is a secure systems programming language leveraging the LLVM toolchain for a high level of optimisation. Utilising Stylus, Longtail is roughly 4 times cheaper than Uniswap V3, making it the cheapest AMM in the Arbitrum Ecosystem, while also being the most rewarding thanks to Utility Mining.

The cost of making a $1000 swap on different AMMs, assuming $1M in annually generated yield and a 0.05% fee on all DEXs, including transaction fees at 1 ETH = $3400

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More on Longtail

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