How Ambient Finance Puts LPs First - Flywheel #62

Doug Colkitt and Miyu join the podcast this week to discuss their DEX rollout, Uniswap's imitation game and solving toxic flow.

Samuel McCulloch
Samuel McCulloch
July 26, 2023

Action Items

  1. Go watch our interview with Miyu and Doug
  2. Read the Ambient Docs
  3. Follow Ambient Finance, Doug, and Miyu on Twitter
  4. Trade on Ambient
  5. Provide liquidity to a pool

Imitation is the Highest Form of Flattery

Let’s get the air out of the room before we get deeper into Ambient. Uniswap, the largest DEX, recently announced the upcoming deployment of Uniswap v4. The new update includes “hooks” which allow developers to create custom liquidity pools. Uniswap envisions hooks to be used to create all sorts of new order types like: “time-weighted average market maker (TWAMM), dynamic fees based on volatility or other inputs, onchain limit orders, depositing out-of-range liquidity into lending protocols, customized onchain oracles, such as geomean oracles, autocompounded LP fees back into the LP positions and internalized MEV profits are distributed back to LPs”

Additionally, with Uniswap v4, all liquidity is housed in a single contract, greatly reducing the cost of deploying new contracts and increasing gas efficiency when trading.

This is pretty powerful operational control not available to Uniswap’s users previously. The only problem though is that all of these features had already been coded and deployed by the team at Ambient (formerly CrocSwap).

What is Ambient Finance?

Ambient Finance is a decentralized exchange (DEX) that allows for concentrated and full range (ambient) liquidity. The entire exchange is run on a single smart contract, with individual AMM pools acting as lightweight data structures rather than separate contracts. This makes Ambient one of the most efficient DEX’s on Ethereum.

Ambient has several advantages over its competitors, with dynamic pool fees to maximize liquidity provider (LP) returns based on market conditions and demand for liquidity, auto-reinvestment of fees from concentrated LP positions, protection against JIT liquidity attacks, gasless transactions and permissioned pool support, where access to pools can be governed through a whitelist.

Account abstraction will also be supported, so that users can sign a transactions offchain and have a relayer execute it for them on their behalf.

These features are miles ahead of what Uniswap has shipped to market and its no wonder they liberally borrowed from Ambient’s design philosophy.

Ambient Alpha

We don’t have much to say other than Ambient has yet to issue a token during this initial launch and test-in-prod period. While nothing explicit has been announced, Doug and the team have hinted at it. In a tweet published the same day as this article, Doug posted a screenshot of research into ambient superconductors and asked “and you’re not farming Ambient anon?”

Do what you want with this information.

Total liquidity on Ambient is not high currently. The largest pool ETH/USDC only has 6m in deposited assets. Once a token comes out, it could help them acquire more liquidity. We shall see.



More from Flywheel

View More

Subscribe and join the Flywheel family

Always Free. Never Spam.

Harness the power of the flywheel.

Not financial advice. Flywheel content is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.

Flywheel and affiliates are not liable for any investment losses or damages resulting from your reliance on any information provided.

2023 ©️ Flywheelpod Inc. All rights reserved.