Bunni v2 Overview
Bunni v2 is a revolutionary Automated Market Maker (AMM) that introduces several groundbreaking features to optimize liquidity provision and maximize profits for liquidity providers (LPs). Building upon the concept of ticks from Uniswap v3, Bunni v2 introduces a new paradigm in decentralized exchange technology.
Key Features
- Liquidity Density Functions (LDFs): Enable efficient liquidity distribution, modification, and swaps with constant gas costs.
- Shapeshifting: Allow LPs to provide liquidity in complex shapes and seamlessly shift or switch between these shapes, either manually or programmatically.
- Autonomous Rebalancing: Eliminate the need for external keepers to maintain optimal token ratios.
- Surge Fee: Protect against sandwiching attacks during autonomous liquidity modifications.
- Rehypothecation: Utilize idle assets to earn additional yield from external protocols.
- am-AMM: Recapture MEV and optimize swap fee revenue using an auction-managed mechanism.
- Volatility-based Swap Fee: Dynamic fee model based on price volatility.
- Auto-compounding: Automatically compound swap fees back into the liquidity position.
Why Bunni v2?
Bunni v2 addresses several shortcomings of previous AMM designs, particularly Uniswap v3:
- Complex liquidity shapes can now be created and managed with a single position, rather than multiple positions.
- Liquidity can now be efficiently moved or reshaped without removing and recreating positions.
- Swap gas costs are now constant, regardless of the number of ticks crossed.
- Swap fees are now auto-compounded back into liquidity, rather than requiring users to manually claim & compound.
By combining these innovations, Bunni v2 creates a new generation of "shapeshifting" AMMs with concentrated liquidity that is automated, highly customizable, and infinitely programmable.
In the following sections, we'll dive deep into each of these concepts, explaining how they work and how they contribute to making Bunni v2 a game-changing protocol in the DeFi landscape.