Astroport is an AMM (Automated Market Maker) created for traders and liquidity providers to buy, sell, and swap assets using multiple liquidity pools. The project which was initially launched on the Terra ecosystem has made its debut, Beta version, on the Injective blockchain.
Astroport uses machine calculated functions and smart contracts to connect traders to buy, sell, and swap crypto assets at specific times and prices.
Why Astroport
One of the earliest challenges faced in DeFi space was having a platform that aids the exchange of assets with ease as is seen in centralized platforms. In response to this challenge, AMMs was created to allow users to swap and exchange crypto tokens. However, several tradeoffs limited the functionalities of earlier-built AMMs such as high gas fees and poor execution.
There are situations where a maker can explore several ideas of asset pairs that should be made available in the AMM, on the other side, liquidity providers are limited to the algorithm or math initiated in the pool. This made LPs unable to serve makers more options because of the algorithm AMMs are designed with.
To solve these problems, Astroport was created as an AMM system on which traders can access several liquidity pools in a one-stop app, easily and with lower fees.
Features of Astroport
Astro Pools
AMMs have pools that are designed using several algorithms that control the prices of tokens accessible in the AMM. Astroport is developed with Constant Product pools, Stableswap Invariant pools, and Liquidity Bootstrapping (LBP) pools with the advantage of more options for users.
Constant Product pools are suited for token pairs with high volatility such as mBTC-UST. This is because trading can occur at any price in the market when using Constant Product pools. Stableswap Invariant pools are used for trading that involves token pairs with an exchange ratio of 1:1 such as stablecoin-base transactions. With this pool type, slippage is reduced to the barest minimum.
The last pool type, Liquidity Bootstrapping (LBP) pool, is useful when releasing and listing a new token in the market. Using this pool type, projects can reduce the impact of congestion and market manipulation that is common when listing new tokens. In addition, Astroport permits developers to create new pool types and integrate them into the platform with less difficulty.
Astro Generators
These systems provide coverage and safety nets for liquidity providers who are connected to Astroport. The advantage is that Astroport allows LPs to earn twice by farming the native token of Astroport, and that of the community they provide liquidity too.
This is possible using proxy-based smart contracts that initiate a “dual farming” system for Liquidity Providers on Astroport and in the third-party community they are part of. The contract which is connected to the Astro Generator authorizes liquidity providers to receive dual governance token rewards.
Astral Assembly
Astral Assembly stands as the Decentralized Autonomous Organisation of Astroport. The aim is to maintain and control the developmental pathway of Astroport in a decentralized form.
Holders of xASTRO are empowered to suggest and implement changes in Astroport through votes. Astroport, being built with CosmWasm smart contracts, attaches governance to the address of the owner of the contract.
Tokenomics of Astroport
$ASTRO is the native token of Astroport. It functions as both a utility and governance token. According to the team, there will be a total number of 1 billion $ASTRO tokens. Holders of $ASTRO tokens can stake their tokens in the xASTRO pool for rewards in xASTRO tokens, activation of governance, and participation in sharing trading fees.
Equally, holders of xASTRO can lock their xASTRO in the vxASTRO pool to get vxASTRO points. This increases their governance power, and grants more access to share from trading fees, and other benefits.
Roadmap and Team behind Astroport
The development of Astroport started in February 2021 when Delphi began researching the Terra ecosystem. By the next month, Delphi Labs, Terraform Labs, Attic Lab, and WE3 (a decentralized design collective) agreed to launch Astroport as anAMM on Terra.
In 2022, Astral Assembly went live on Terra 2. The implication is that complete control of Astroport’s Terra 2.0 smart contracts was given to the Astral Assembly making the Astra Assembly the admin overall smart contracts for all new pairs created on Astroport.
There was also an upgrade made to the Astroport UI that allows users now have access to charts for every liquidity pool. With this, users can compare fees and impermanent loss on Astroport. Another change made in 2022 was the implementation of the ARC-20 governance proposal. This activated the issuance of double rewards for those who trade Valkyrie trading pairs (VKR-axlUSDC).
Instead of unlocking Astroport tokens in December 2022 as planned by the team in 2021, the community postponed the unlocking due to the impact of the collapse of Terra in 2022.
In January 2023, Astroport testnet was deployed on Injective; a new user interface was released on Astroport.fi, and a new document for developers to build with.
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