2.2.8 AMM+

Aperçu

Earn yield in a few clicks on coinflex.com/amm

 

What are AMMs (Automated Market Makers)?

AMMs are yield-earning products that allow lenders to earn profits from trading fees by providing liquidity to an exchange. 

AMMs enable passive capital (i.e. assets that are not being actively deployed into trading and investing) to effortlessly buy and sell assets and earn fees from market volatility.

 

AMMs in Crypto

Traditionally, market making activity has been limited to the largest financial institutions, such as banks and trading firms.
Crypto kills two birds with one stone by providing the everyday investor with the ability to put their crypto assets to use and earn yield, while also providing much needed liquidity to DEXes (decentralized exchanges). 

On DEXes, investors are able to deploy their assets to a liquidity pool, which provides the liquidity needed for trades to occur. AMMs are mutually beneficial for both the user and the exchange.

 

What is AMM+

Uniswap and other DeFi exchanges pioneered the concept of retail AMMing, which was a great leap forward for crypto. Just like with any pioneering technology, there is a lot of room for growth in the AMM space.

CoinFLEX has created its own AMM, called AMM+. by taking the concept of AMMs from decentralized spot markets and applying it to the futures markets on a centralized exchange. Due to the benefits of futures, AMM+ allows users to access up to 10x leverage (Capital Boost) and offers a wide range of collateral options.

 

CoinFLEX AMM+ Advantages over Uniswap

How does the AMM+ stack up to the industry-standard Uniswap v3 model?

1) AMM+ is More Capital Efficient: $1 on CoinFLEX Has a Larger Impact

By providing users with access to leverage, users can benefit from greater capital efficiency. 

 

Because the futures markets are far larger than the spot markets, AMM+ users benefit from higher trading volume than DEX volumes. For reference, the total value locked (TVL) in Uniswap v3 is roughly $6.5B but trades approximately $1B in daily volumes. Comparatively, the CoinFLEX AMM+ has roughly $100M TVL and has traded between $200M to $1B in daily volumes. 

 

Higher liquidity encourages volume growth and offers better pricing by reducing the spread and price slippage.

 

2) Fees

  • AMM+ users earn a 0.03% FLEX rebate from each trade
  • Lower taker fees than DEXes (0.04% vs 0.30%) result in more chances to trade against the AMM
 

3) Multiple collateral types

Users are able to use any asset as collateral when opening a leveraged AMM+ position.

 

This means, if users have assets earning little to no yield elsewhere, they can put the funds to work in the AMM+ as collateral. For example, if users want to open an ETH/USD position, they can use other assets such as BTC or DOGE as collateral. 

 

How does AMM+ benefit you?

AMM+ was created to democratize market making, enabling a vastly wider user base and capital pool to earn from market volatility.

With the power of this CeFi Orderbook + DeFi AMM hybrid model,  AMM+ works to efficiently allocate capital to markets that require  liquidity.

AMM+ improves the overall liquidity of CoinFLEX markets and is a way for users to use it as a customized tool to earn yield-enhancement opportunities.

 

How AMM+ is designed to be used

Select the price range where your liquidity will be allocated. 

AMM+ is designed for holders who want to earn passive income on their crypto,  rather than those who seek to earn active income via trades. AMM+ positions are therefore designed to have a broad range, as it will require significantly less time and attention to manage, so you can earn income on your crypto passively.

 

A narrow range may result in higher fees when the asset is trading within that price range, but the price of a crypto asset is less likely to stay in a narrow range for long, and is therefore more suited for active capital. Remember, you will not earn any yield if the price falls outside of your range.

 

 


Tutorials

Setting up an AMM+ Position:

Step 1. Enter the AMM+ page

To begin using AMM+, click the AMM+ tab on the dashboard of the main home page. 

Screenshot 2021 10 19 at 5.59.47 PM 2.2.8 AMM+

 

Step 2. Select your expected price direction

By selecting the direction, you are making a decision on where you think the market price is heading – and based on that what your AMM+ will do in best/worst case scenarios. It’s important to remember the ultimate goal is to stay in range because this is when you are earning trading fees and your AMMs are scalping (working for you).

Mainly increasing

You expect the price of the asset in your AMM+ position will increase.

 

Best Case Scenario to Exit Without a Loss: 

  • Be in-range 

  • Earn some yield 

  • Ultimately exit when prices are near/above your range so you won’t exit at a loss or further positional exposure. 

Less Favorable Scenario Occurs: 

  • Prices get closer or through the bottom of your range, 

  • You accumulate a long position, which you are not opposed to, as your view is generally bullish and you’re willing to patiently wait for a rebound.

Worst Case Scenario:

  • Price falls below the min of your range and never returns, leaving you at a loss.

 

Mainly decreasing

You expect the price of the asset in your AMM+ position will decrease.

 

Best Case Scenario to Exit Without a Loss

  • Be in-range 

  • Earn some yield

  • Ultimately exit when prices are below your range

Less Favorable Scenario Occurs: 

  • Prices get closer or through the top of your range

  • You accumulate short positions, which you are not opposed to, as your view is generally bearish and you’re willing to patiently wait for prices to fall.

Worst Case Scenario:

Price rises above the max of your range and never returns, leaving you at a loss.

 

Range-bound

You expect the price of an asset will fluctuate at a set price range and want to take advantage of stable price action.

 

Best Case Scenario to minimise losses as much as possible: 

  • Be in-range 

  • Earn some yield 

  • Exit Neutral positions as close to your midpoint as possible. 

Worst Case Scenario: Price never returns to your midpoint.

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Step 3. Select the trading pair

Select which asset you want for your AMM+ position. CoinFLEX has a wide range of options to choose from!

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Users can view the AMM+ Statistics at the top of the page to see which pairs have the highest 24 hour average or 7 day average APR for reference before creating an AMM. The rates are subject to change and are an average across all users. Depending on your range and leverage you may get a different APR than the 24 hour or 7 day average APR

To find more information on AMM+’s current statistics, you can visit the transparency page.

 

Step 4. Choose if you want capital boost

Select capital boost by clicking the toggle on the right. This option is switched on by default.

Capital boost gives you the option to set up an AMM+ position in the perp market, which provides you up to 10x leverage.

If you choose capital boost, select the amount of leverage between 1x to 10x and pick a collateral to deploy from your available balances. For example, if you are choosing the BTC/USD trading pair, you can use any other collateral such as BCH or ETH. 

Be aware that choosing capital boost will put you at risk of liquidation if the prices move opposite to your chosen price expectation.

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Step 5. Input amount

Enter the amount of capital you’d like to allocate to your AMM+ position. You will need to input a minimum of $200 USD worth of crypto assets as collateral.

For unleveraged range-bound positions you will need to have a minimum of $200 USD worth of crypto for both assets in the trading pair as collateral.

%E8%9E%A2%E5%B9%95%E6%88%AA%E5%9C%96 2022 01 20 %E4%B8%8B%E5%8D%886.57.21 2.2.8 AMM+

 

Step 6. Choose the price range

This is where you select the range where your liquidity will be allocated. The tightness of the range will determine the size of your returns. 

A broad range will consistently earn fees but will be less concentrated. This has lower risk, but you are more likely to stay within the range and earn trading fees.

A narrow range will result in higher fees when the asset is trading within that price range, but you risk not making any fees if the price goes outside of your range. 

Please remember, if you are leveraged and the price of your assets moves outside your range, there will be a risk of liquidation.

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Step 7. Begin using AMM+

Before proceeding, confirm all the information you have selected on the AMM+ page is correct. After confirming this, click “Begin AMM+” to start earning yield on AMM+!

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Managing Your Position 

Once you have set up an AMM+ position, you can manage your open position by switching to the AMM+ Positions tab. To manage your open positions, use the following steps:

 

Step 1: Review the details of your position

The “Open” tab is the default tab, which you can use to manage and review your open positions.

Each AMM+ position will have its own information card, including information such as the title of the AMM+ position, the date of entry, leverage, trading pair, and more.

You can click the Balance Breakdown button below your APR to review information such as total account balance, initial balance, current balance, and more. 

You can click the More Details button to view all the information on the trade history of your specific AMM+ position, your borrow and liquidation history, interest payment history, and more.

If you want to add or withdraw collateral, proceed to Step 2.

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Step 2: Add or withdraw collateral 

To add collateral or withdraw collateral, click the add collateral button to the left of the redemption button. This will open a pop up box, which will allow you to proceed.

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Step 3: Input information

Select whether you want to add or withdraw crypto, the crypto asset you want to select, and the amount from your available balance.

 

Step 4: Click confirm

 

Redeeming Your Position

Once you have set up your AMM+ position, you can redeem your open positions by switching to the AMM+ Positions tab. If you want to learn how to redeem your open positions, use the following steps:

 

Step 1: Identify your AMM+ position

The “open” tab is the default tab, which you can use to redeem your open positions. You can identify your different AMM+ positions with the ID in the top right corner.

2022 01 20 %E4%B8%8B%E5%8D%888.18.45 e1642751761214 2.2.8 AMM+

 

Step 2: Click the redemption button

At the bottom of the box of the specific AMM+ position you want to close, click the redemption button.

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Step 3: Choose your redemption method 

To receive the base currency of your trading pair, for example to receive BCH in the BCH/USD trading pair, choose “physical delivery” in the redemption method drop down menu.

The information will show the current Balance and a link to the “add collateral” pop up box to show your estimated redemption balance.

To deliver your position to a sub account, click “sub-account delivery” in the redemption method drop down menu. 

The information will show the current balance, position, and borrow USD Position.

Screenshot 2021 10 19 at 8.47.32 PM 2.2.8 AMM+

 

Step 4: Redeem

Once you have chosen your redemption method, click redeem. 

 

Step 5: Review your closed position

Click the ‘closed’ tab on the AMM+ positions page and review the information.

2022 01 20 %E4%B8%8B%E5%8D%888.29.25 e1642751883473 2.2.8 AMM+

 

Step 6: Check your wallet

Ensure your crypto assets have been delivered to your wallet. If you have delivered to a sub account, click the sub-account button under the account dropdown menu next to “Wallet & Order.”

You may have existing open positions on the exchange, so make sure you go to the exchange to close any open positions. 

If you have chosen “physical delivery”, click the “balance” button in the “Wallet & Order” dropdown menu and check that your crypto assets have been credited. 

 


I’d like to read more about AMM+

How to Crush AMM+: Where to Set Price Ranges

A Brief Introduction to AMM+ and the Importance of Liquidity

How CoinFLEX’s AMM+ Solves All the Issues of Other AMMs

Trading Options Using LP Tokens on CoinFLEX’s AMM+ Product

I need more help

For enquiries, please contact our customer service via live chat or ask in CoinFLEX official Telegram group: https://t.me/coinflex_EN

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