Stableswap AMM

Overview

The past few years have marked a rapid rise in competition amongst stablecoins and LSTs. Critical to this trend has been the “Stable” AMM, which allows for like assets (say, for instance, the 'hard-pegged' USDC and the soft-pegged LUSD) to be traded against each other in a sustainable way.

While concentrated liquidity ranges technically allow for the creation of trading ranges for like assets, liquidity providers must carefully manage scenarios where pseudo-pegged assets deviate from their pegs. As a result, concentrated liquidity for like assets has not yet gained widespread adoption, except for more established pairs like USDC-USDT.

Stable AMMs (tentatively called “Thruster Steady”) build on the classic x ∗ y = k model by introducing a stable invariant, creating a range around the 1:1 mark where prices remain relatively or almost constant. This approach ensures that liquidity is available at all price points between pooled assets, with the majority of trading activity typically occurring within a narrow band around the peg value, usually within 50-100 basis points, depending on the pool's "A" or Amplification factor. In cases like these, Stable AMMs are much more capital-efficient than their constant product counterparts.

In practical terms, Stable AMM pools facilitate deep trading volume around the peg value while enabling seamless trades and price discovery during periods of de-pegging, whether upward or downward.

StableSwap can also support more than two assets, allowing for increased trading capture.

What We're Changing​

To be honest, we're not 100% sure how active the Stable AMM on Thruster will be and so we haven't made any notable changes.

In conversations with Blast contributors and looking at how the chain is structured, it's clear that USDB (Blast USD) will be prioritized and a focus. As we intend on recycling Blast native yield into our product in a variety of unique ways, we want to incentivize growth in the supply of USDB and ETHB (Blast ETH).

However, for chain-native stables and potential LSTs for assets like BLAST, we hope our Stable AMM will provide a strong playing ground for these like assets to gain liquidity, users, and general traction.