LIFINITY protocol

Inspiration

Since its launch in 2018, AMMs have grown to become the core infrastructure of DeFi, allowing anyone to trade and market make in a few clicks. Although TVL and trading volume has shown exponential growth, the underlying technology has seen little improvements. Issues such as capital inefficiency, impermanent loss and high fees remain unsolved, costing both traders and liquidity providers unnecessary fees that don’t exist in centralized finance. To further improve the trading environment of all users and push DeFi to mainstream, it is essential that the these problems are solved.

What it does

LIFINITY is a combination of a swap aggregator and a proactive market maker. The aggregator looks for the best price across integrated exchanges and executes transactions. It also finds the best route for swapping when it is cheaper to swap through a different token. The proactive market maker is an AMM designed to improve capital efficiency and reduce impermanent loss. It achieves this by 1. leveraging liquidity, 2. market make using an oracle, 3. rebalancing the pool to the bonding curve by adjusting liquidity. To find more details, please watch the video or try it out at lifinity.io.

How we built it

The proactive market maker is a fork of the Solana token swap program and the user interface is a fork of the Raydium UI. To get accurate and on-time market data, we use the Pyth oracle which provides reliable sub-second price feed. So far, we have integrated Raydium, Orca, Serum and Saber to our swap aggregator, some of the best exchanges of Solana.

Challenges we ran into

Understanding how Solana works was a real challenge in the beginning, but with the help of the Solana community in discord and the wide range of resources provided by the team, we were able to complete our prototype on time.

Accomplishments that we're proud of

What we’re most proud of is the design of the market maker which we spent most of our time on, especially on trial and errors to ensure safety. However, what’s more exciting is that the journey has just started and how we can work with the community to further improve the protocol.

What we learned

There are a ton of things that we’ve learned through the hackathon, but the biggest one would be learning the power that "low latency, censorship resistant computers" have and what we can do with them. There are so many things we can do on Solana that wasn’t possible on preceding chains and we're really excited to be building on it.

What's next for LIFINITY protocol

After the protocol is stable and fully functional, we will work on a composable AMM for anyone to market make on-chain using their own market making algorithms.