Liquidity Management Pools

The role of Liquidity Management Pools within the Tokemak protocol.

Introduction to Introduction to LMPs

201 Level Core Concepts Course

Critical Info!

Rokemak v2 is comprised of two parts: the DAO-facing liquidity management pools and the user-facing Autopilot. Together, these parts work together to aggregate and deploy liquidity at a predictable market rate.

Liquidity Management Pools (LMPs) are a key feature of the Tokemak protocol. They are designed to optimize liquidity deployments, addressing the issue of stagnant liquidity that hinders LP returns and creates market inefficiencies.

Function of LMPs

LMPs are configured with DEXs and assets, and algorithmically optimized by the Autopilot, which actively monitors all destinations for liquidity. This allows for the aggregation and optimal rebalancing of liquidity across integrated DEXs and Assets.

At launch, pre-defined LMPs will be available for ETH LPs that want a dynamic LP exposure, instead of a static LP approach that involves manual hops between pools.

Customizable LMPs

The next major step for Tokemak's Autopilot lies in fully customizable LMPs. Customizable LMPs are a tool that empowers LPs with a granular selection of assets and pools offering dynamic LP exposure. This allows users to tailor LMPs according to individual risk preferences, and enables the creation of DAO LMPs that rebalance liquidity across specific assets (e.g. @swellnetworkio LMP), or specific DEXs (e.g. ETH LST @mavprotocol pools).

Benefits of LMPs

LMPs are a novel dynamic approach to LPing, and external parties can create and offer LMPs to existing users as a new product that generates optimized returns across a tailored selection of different DEXs and assets.

In summary, Tokemak's Autopilot allows LPs to make the best use of available assets, ultimately creating a novel Liquidity Aggregation primitive that improves efficiency in DeFi liquidity markets.