Proposal: Integrating Concentrated Liquidity Pools for ShapeShift with FOX and USDC

Proposal Discussion
1

Proposal Due Date: N/A

Overview

The primary objective of this proposal is to integrate concentrated liquidity pools (CLPs) into ShapeShift’s ecosystem. This integration enhances liquidity efficiency, improves user experience, and strengthens FOX token utility by leveraging proven mechanisms from established models like Uniswap V3 and Velodrome. The proposal aims to align with ShapeShift’s decentralized ethos while maximizing the impact of FOX emissions through innovative flywheel dynamics.

Goals

  1. Increase Liquidity Depth: Establish ShapeShift as a leading decentralized exchange (DEX) by offering CLPs for FOX and USDC, solving the challenge of insufficient on-chain liquidity.
  2. Boost FOX Token Utility: Integrate FOX emissions into the ecosystem, incentivizing liquidity providers (LPs) and driving deeper, more persistent liquidity.
  3. Streamlined Architecture: Combine the strengths of existing models (Uniswap V2/V3, Curve, Convex) into a user friendly, efficient design tailored for FOX and USDC.

Scope of Work

The project leverages existing frameworks for CLPs, minimizing development overhead and expediting deployment. Key deliverables include:

  1. Smart Contract Development:
  • Adapt core and periphery contracts from Uniswap V3 to support FOX USDC ,USDA,and USDF liquidity pools.
  • Implement router contracts to enable multi-pool swaps and optimize user experience.
  1. Protocol Enhancements:
  • Introduce tools to aggregate and paginate liquidity pool data for seamless off-chain interaction.
  • Design an intuitive API for developers to access pool information with minimal complexity.
  1. Testing and Documentation:
  • Comprehensive testing to ensure robust performance and security.
  • Clear documentation to support community developers and integrators.

Current Opportunities

This proposal leverages existing tech and protocols (e.g., Velodrome, Uniswap V3), allowing ShapeShift to innovate efficiently. The implementation will focus on:

  • Capital efficiency for stable and low volatility asset pools.
  • Simplifying developer interaction with well documented, modular components.

Key Technical Features:

  • Efficient Data Access: Streamlined querying for pool data, rewards, and liquidity metrics through a single API call.
  • Developer-Friendly Tools: Reduced complexity for developers building on the protocol.
  • Adaptability: Modular design for future enhancements and integrations.

Evaluation Metrics

Success will be evaluated based on the following metrics:

  1. Liquidity Growth: Increased TVL (Total Value Locked) for FOX-USDC pools.
  2. Adoption: Integration of ShapeShift’s CLPs across other leading DEXs.
  3. User Retention: Growth in the number of persistent liquidity providers (LPs).
  4. Emissions Efficiency: Optimized FOX rewards for LPs, ensuring high capital efficiency.
  5. Decentralization: No off-chain gauge computations; full protocol transparency.

Submission Requirements

  1. Core Deliverables:
  • AMM constant product implementation (Uniswap V2-inspired).
  • Support for multi-pool swaps and dynamic price impact calculations.
  • Registry of approved factories for pool creation, gauges, and managed rewards.
  1. Deployment and Testing:
  • Blockchain: Mainnet
  • Fully functional and tested by N/A.

Budget

The budget will depend on the development team’s scope and timeline. However, leveraging existing open source solutions like Velodrome and Aerodrome significantly reduces costs and development time.