V3 AMM

Lumnia's V3 AMM builds upon the foundations of UniV3 with advanced customizations designed to improve efficiency, performance, and flexibility. By integrating innovative features, Lumnia's V3 AMM provides users and liquidity providers with a superior trading and liquidity provisioning experience. These enhancements not only optimize capital efficiency but also adapt to the dynamic nature of DeFi markets.

---

1. Customizable Tick Spacing

Lumnia's V3 AMM introduces the ability to customize tick spacing settings for individual liquidity pools. This feature ensures that each pool can be tailored to its specific use case, resulting in optimized performance.

• Flexibility in Tick Parameters: Liquidity providers (LPs) can fine-tune tick spacing to match the characteristics of the token pair.

• Improved Efficiency: By customizing tick spacing, the protocol ensures better capital utilization and tighter pricing.

• Enhanced Volume and Fee Generation: Pools operating with optimized tick settings are more efficient, leading to higher trade volumes and increased fee income for LPs.

This flexibility allows Lumnia's V3 AMM to support a broad range of asset pairs, whether they are volatile or tightly correlated, with unmatched precision.

---

2. Directional & Dynamic Volatility Fees

Lumnia's V3 AMM features a dynamic fee system that adapts to market conditions, ensuring that fees are always aligned with the current volatility and risk profile of the market.

• Dynamic Adjustment: Fees are automatically adjusted based on the current volatility of the liquidity pool.

  • During periods of low volatility, fees decrease to encourage more trading activity.

  • During periods of high volatility, fees increase to compensate for the heightened risk.

• Directional Fee Customization: Each liquidity pool can set unique fee ranges for both buying and selling directions, enabling fine-tuned fee structures:

  • For example, fees can be higher for selling a volatile asset during a market downturn or lower for buying to incentivize demand.

  • This flexibility helps stabilize markets and adapt to project-specific needs.

• Efficiency Gains: The dynamic fee system ensures that fees accurately reflect market conditions, leading to:

  • Improved fee generation for LPs during volatile markets.

  • Reduced friction for traders in calm market conditions.

By aligning fees with market activity, Lumnia's V3 AMM creates a more efficient and fair trading environment for both LPs and traders.