TenderSwap - Efficient LST Liquidity
TenderSwap is Tenderize’s decentralized exchange tailored for liquid staked tokens (LSTs). By leveraging a shared liquidity model, it optimizes liquidity for validator-specific tTokens while reducing capital inefficiencies.
Why TenderSwap?
Shared Liquidity Pools:
Unlike traditional DEXs like Uniswap or Curve, TenderSwap consolidates liquidity for homogenous assets.
All tTokens for the same underlying asset (e.g., tLPT) share a single pool, enabling efficient swaps and eliminating liquidity fragmentation.
Capital Efficiency:
No separate liquidity provision is required for new tTokens.
New tTokens automatically use the existing pool, ensuring instant liquidity without additional capital.
Low Slippage and Dynamic Fees:
Swaps incur fees that adjust dynamically based on pool utilization and specific tToken demand, ensuring fair access and incentivizing balanced liquidity.
Applications Beyond Tenderize:
Staking Service Providers: Offer liquid staking without managing liquidity in-house.
Solo Stakers: Gain liquidity or lend staked assets while continuing to validate networks.
Indexes and ETFs: Easily rebalance or sell individual tTokens.
Borrowing and Lending Protocols: Use TenderSwap’s deep liquidity for routing and liquidations.
Comparison to Traditional DEXs:
Uniswap/Curve Challenges:
Require separate pools for each LST, leading to inefficiencies and fragmented liquidity.
Capital is locked in pools instead of being used productively elsewhere.
TenderSwap Solution:
Shares liquidity across all like-assets, maximizing efficiency and decentralization while reducing costs for users.
Expanding Beyond Tenderize LSTs:
TenderSwap’s innovative liquidity model can also support protocol-specific LSTs beyond Tenderize, fostering a broader ecosystem for liquid staking.
The Tenderize team has brought this novel approach to Ethereum with lpETH.
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