AMM V2

AMM V2 for HyperLiquid on DonutSwap will bring several advanced features to enhance trading and liquidity management. It will introduce improved liquidity provision mechanisms, allowing users to add liquidity in various ratios rather than a fixed 50/50 split, giving liquidity providers (LPs) more flexibility in managing risk and exposure, particularly with volatile assets like Runes. Dynamic fees will replace fixed transaction fees, adjusting based on market conditions such as volatility and liquidity, which will help reduce slippage and make trading more efficient.

Another key feature is concentrated liquidity, which allows LPs to allocate their capital within specific price ranges where they expect the most trading activity, increasing capital efficiency and providing deeper liquidity at relevant price points. Customizable pool parameters will enable the creation of tailored liquidity pools to meet the specific needs of different tokens and trading pairs, optimizing liquidity and stability for Runes.

AMM V2 will also enhance security with improved measures against common DeFi vulnerabilities and exploits, and governance mechanisms will be strengthened to give the community more influence over protocol decisions. Additionally, it will integrate seamlessly with other DeFi protocols and platforms, enhancing interoperability and expanding the utility and accessibility of Runes across various blockchain ecosystems.

The user interface will be more intuitive and user-friendly, with enhanced analytics and tools providing better insights into liquidity provision, trading activities, and market conditions. These improvements will make trading and liquidity management more efficient and attractive, driving greater adoption and utility for Runes tokens.