SmarDex stands out as a DEX for one particular reason: it is the first to have found a real solution to the Impermanent Loss problem that plagues DeFi. Indeed, after two years of research, the SmarDex team has developed an algorithm capable of reducing Impermanent Loss in 100% of cases. This method is completely automated, based on mathematical principles, and agnostic. In other words, by providing liquidity to SmarDex, you are guaranteed to experience less Impermanent Loss than on any other existing DEXs, including the famous Uniswap. You might even achieve Impermanent Gain depending on the circumstances.
This algorithm is directly integrated into our Liquidity Pools. Thus, we have unique and intelligent Liquidity Pools. That's why we decided to rename them "Volatility Vault".
This name reflects the fact that our Liquidity Pools leverage market volatility. The more volatile the market, the more significant our performance compared to the competition.
Particularity in providing liquidity on SmarDex
The value of the two tokens in USD may not be equal on SmarDex, which differs from other DEXs that typically use a 50/50 USD value split for both tokens. SmarDex's pricing is based on its unique algorithm that uses fictive reserves, which are not directly proportional to the actual reserves in the contract.
This algorithm rebalances the reserves to maintain a favorable Liquidity Pool for liquidity providers. When adding or removing liquidity, the contract's real reserves are used instead of the fictive ones, potentially leading to a discrepancy in the value of the two tokens. For instance, to contribute $2500 worth of tokens, you might need $1500 in ETH and $1000 in WBTC. For more information concerning the functioning of the fictive reserves, please refer to the Whitepaper