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Cosmos Pool

Welcome to Cosmos Pool! This project aims to solve one of the key obstacles in Concentrated Liquidity Market Makers (CLMMs): the requirement for users to provide liquidity with tokens on both sides of a trading pair within a specific price range. Our solution enables single-token deposits by matching users with complementary liquidity providers, potentially offering higher percentage gains compared to traditional Constant Function Market Makers (CFMMs) while managing risks akin to single-sided CFMMs. Built for Unichain, the project leverages Uniswap's liquidity formulas and integrates with Uniswap-style pools for seamless token management.

Cosmos Pool Liquidity Matching Mechanism:

Users deposit a single token (e.g., USDC or WETH) into a smart contract. The system matches users with complementary providers (e.g., a USDC depositor with a WETH depositor). Using the Uniswap L3 Formula for liquidity matching and calculate the liquidity. We then deposit the tokens in the Uniswap liquidity pool.

Repository Structure

Smart Contracts

  • LiquidityManager.sol: Core smart contract for handling deposits, liquidity matching, and withdrawals.
    • Key Functions:
      • depositUSDC(uint256 amount): Deposit USDC for matching.
      • depositWETH(uint256 amount): Deposit WETH for matching.
      • triggerLiquidityMatching(uint256 amountUSDC, uint256 amountWETH): Match and provide liquidity (owner-only).
      • withdrawAndDistribute(): Withdraw liquidity and return funds (owner-only, after 10 minutes).
    • Events: UsdcDeposited, WethDeposited, LiquidityMatched, MatchingTriggered, WithdrawAndDistribute.
  • MockNonFungibleToken.sol: Mock implementation of a non-fungible position manager for testing liquidity provision.
    • Key Functions:
      • mint(...): Mints an NFT representing a liquidity position (returns hardcoded values for testing).
      • withdrawTokens(address token, address to): Transfers tokens back to the caller (mock implementation).

Python Scripts

  • lp-provision.py: End-to-end testing of liquidity provision, including contract deployment, deposits, matching, and withdrawals.
  • main.py: Utility script for checking account balances on a local Hardhat node.

Supported Tokens

  • WETH (Wrapped Ether): 0x4200000000000000000000000000000000000006
  • USDC: 0x078D782b760474a361dDA0AF3839290b0EF57AD6

How It Works

1. Deposits

  • Users call depositUSDC or depositWETH, transferring tokens to the LiquidityManager contract.

2. Matching

  • The owner triggers triggerLiquidityMatching, which calculates matched amounts based on available deposits and a hardcoded price range (±10% of the current WETH price).
  • The system uses Uniswap's liquidity formula to calculate the optimal liquidity provision.

3. Liquidity Provision

  • Tokens are approved and minted into a liquidity position via the mock position manager.
  • The liquidity is deposited into a Uniswap V3-style pool on Unichain.

4. Withdrawal

  • After a delay (10 minutes), withdrawAndDistribute returns the original deposit amounts to users.

Integration with Unichain and Uniswap

Unichain Deployment

  • The project is deployed on Unichain, a blockchain optimized for DeFi applications.
  • Unichain's compatibility with Ethereum allows seamless integration with Uniswap-style contracts and tools.

Uniswap Integration

  • Liquidity Formula: The project uses Uniswap's concentrated liquidity formula to calculate the optimal amount of liquidity to provide within a specified price range.
  • Liquidity Provision: The system interacts with Uniswap's NonfungiblePositionManager to mint liquidity positions and deposit tokens into the pool.