[UDC 2021] QuarkChain founder explains virtues of concentrated liquidity pool
Qi Zhou highlights benefits of increased capital efficiency at UDC 2021
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임준혁 2021년 9월3일 14:36
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Qi Zhou, founder of QuarkChain. (Provided by Dunamu)

Dunamu, the firm that operates the Upbit exchange, wrapped up its blockchain conference UDC 2021 on Sept. 2

Watch the first day of speakers here and the second day here.

Qi Zhou, founder of QuarkChain, spoke during the second day.

Qi was a senior engineer at Google and Facebook before stepping into the blockchain world.

QuarkChain offers a scalable blockchain infrastructure that applies sharding technology. Sharding involves partitioning a blockchain network into separate components, or shards, to decrease latency.

Qi's speech focused on concentrated liquidity for multiple-pooled assets. Concentrated liquidity refers to focusing a liquidity pool on a target price range to increase capital efficiency.

By narrowing the price range in which you want to concentrate your liquidity, you can focus liquidity on prices that an asset regularly hits instead of spreading it out over a wide range of prices that the asset rarely or never hits.

For example, let's say nearly all transactions for DAI and USDC occur within a range of $0.99 and $1.01. Without concentrating liquidity, it'd be spread out over the entire price range from $0 to the highest price. Around 99.5% of the liquidity pool would sit there idle.

If you want a really technical explanation about concentrated liquidity, read Qi's article on the subject here.

The first protocol to implement concentrated liquidity was Uniswap.

"Through concentrated liquidity, Uniswap V3's capital efficiency was increased by 2000 times compared to V2," Qi said.

He added that within three months of V3's launch, Uniswap's total value locked (TVL) increased to around $2.58 billion.

Uniswap only offers concentrated liquidity for asset pairs, however.

QuarkChain aims to concentrate liquidity for multiple-asset pools, or pools of three assets or more.

"We aim to achieve concentrated liquidity pools for up to four or five assets at a time," Qi said.

Qi also hinted at a new DeFi project in the works for QuarkChain called Smoothie Finance.

UDC 2021 articles are sponsored by Upbit.

제보, 보도자료는 contact@coindeskkorea.com

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