Benefits of using Nabla

Nabla has four main target user groups that profit from using Nabla’s innovations:

  • Liquidity Providers: Better Risk-Adjusted Returns Nabla's unique design reduces the risks and drastically improves the risk-adjusted returns for liquidity providers by avoiding impermanent loss, and by separating the roles of token provision and risk-taking. This allows low-risk capital to be put to use in the Swap Pools and profit from swap fees, whilst less risk-averse capital can profit from the high ROI in the cash-neutral Backstop Pool.

  • Traders: Lower Slippage The intelligent, oracle-informed pricing allows for maximal capital efficiency (comparable to liquidity on Univ3 which would get rebalanced each block). This, combined with the low-risk single-sided liquidity provision, allows Nabla to operate with significantly lower slippage and competitive fees compared to other AMM designs.

  • Token Issuers: Drastically Reduced Liquidity Costs Token issuers can provide or attract deep liquidity for their tokens at much lower costs compared to other AMMs. This is thanks to the single-sided Swap Pools (which reduce the liquidity requirements by 50%), the extreme liquidity concentration (which further drastically reduces the capital needs), and the much higher risk-adjusted organic LP earnings (which reduces the need for additional incentives).

  • Arbitrageurs: Frictionless and Risk-free Arbitrage The lion share of swap volumes on classic passive AMMs like Uniswap or Curve comes from arbitrage transactions, which are essential for these AMMs to keep token prices updated to the current “fair value” (which is for most tokens found on the big centralized exchanges like Binance and Coinbase). Due to its intelligent, oracle-informed pricing, Nabla does not need this kind of arbitrage to keep the prices updated. On the contrary, Nabla can be used as counterparty by arbitrageurs to update the prices on passive AMMs - as Nabla instantly reflects changes in the current “fair token prices”, and offers deep liquidity with almost negligible slippage. The big advantage of using Nabla as counterparty instead of centralized exchanges is that arbitrage transaction can be set up atomically onchain, and thus risk-free for the arbitrageur (the arbitrage transaction on the passive AMM and the counter-trade on Nabla are bundled together - and either both go through, or none) - which is a significant edge over the classic AMM-CEX arbitrage, which can’t be set up atomically, and thus always comes with some residual risks.

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