Liquidity Pools
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PandiFi homogenizers are regular ERC-20s with some special features. As such, they can work with any AMM that supports ERC-20s.
That said, the PandiFi protocol and PandiFi interface are designed to work specifically with Uniswap V3 for a few reasons:
- Uniswap is the undisputed leader of decentralized exchanges, in terms of market capitalization, volume, and innovation
- Uniswap V3 introduced the concept of concentrated liquidity
- Like stablecoins, fixed income assets have a need for some concentrated liquidity because they typically trade in a narrow price range. In other words, having uniform amounts of liquidity from prices ranging from 0 to infinity is wasteful. Rather, you need a disproportionate amount of liquidity between $90 and $110. One way to achieve this is a variable product AMM curve as discussed here. The second approach is that of Uniswap V3. Uniswap's AMM has a big advantage over variable product AMMs in that it can support concentrated liquidity at any price point. For example, if the value of a digitized loan from $100 to $70, liquidity can reconcentrate at the $70 price point.
As discussed elsewhere, PandiFi V1 will create a certain set of homogenizers for the U.S. residential mortgage market. PandiFi will also create a set up corresponding liquidity pools on Uniswap V3 i.e.,
| PandiFi Homogenizer | Uniswap V3 LP Pair | LP Fee Tier |
|---|---|---|
| CF30-2500-1 | CF30-2500-1/USDC | 0.05% |
| CF30-3000-1 | CF30-3000-1/USDC | 0.05% |
| CF30-3500-1 | CF30-3500-1/USDC | 0.05% |
| CF30-4000-1 | CF30-4000-1/USDC | 0.05% |
That said, as with homogenizers, PandiFi DAO doesn't have a kind of monopology on the creation of liquidity pools.
Any Ethereum user can create a custom homogenizer and a custom liquidity pool on Uniswap V3 or any other AMM.