Maverick, Uniswap, TraderJoe; Which DEX is best for LPs?
Maverick, Uniswap, TraderJoe: Which DEX is the best for LPs? #
A quick recap of DEXes history #
Since Uniswap V2 and its novel way to passively make market with the constant product formula, the DEX landscape greatly evolved. We discovered that the constant product was not capital efficient at all, and didn’t benefit to either LPs and traders: Most of the liquidity was idle, resulting in poor returns for LPs as well as high slippage for traders, despite high TVL.
Since UniV2, we saw some major innovation concerning the way LPs can manage their liquidity. I noticed 3 novel products that I will cover in this post.
Uniswap V3 #
Concentrated liquidity, fee tiers. Liquidity is static, and does not follow the price Fee tiers are limited
-> Liquidity managers such as Arrakis, Gamma
Trader Joe #
Liquidity shapes
Still Static liquidity
UI only allows for basic liquidity shapes
Maverick #
Limitations of Maverick #
Static positions in the pool is required to set the price. Without static positions, the AMM would be unable to rebalance the positions of dynamic modes
Key differences between Maverick and Trader Joe #
- No need to pay gas for rebalancing
- Liquidity shapes can be user define within the Maverick UI