Wombat to Launch the Innovation Pool
An exciting update just arrived around the block!
The Innovation Pool will be launching on the 22nd of December. With that in mind, a listing of three new tokens will come along! Namely TUSD, FRAX, and BUSD.
Read more to learn about the upcoming pool’s mechanisms and discover what’s in it for users!
What is the Innovation Pool?
There are all sorts of stablecoins! We broadly categorize them on our exchange by risk levels. Our Main Pool houses the most solid of all stablecoins. Newer innovative stablecoins are rather volatile as compared to the time-tested ones in the Main Pool.
Considering Wombat’s sustainability and integrity as an exchange you trust, we prioritize managing risks; thus, a separate pool is carved out to house riskier tokens. In this way, wild swings would not affect the Main Pool, isolating risk and facilitating balance.
- Main pool: well-established and time-tested stablecoins (e.g., USDC USDT DAI BUSD)
- Side pool: newer innovative stablecoins and more volatile compared to those in the main pool
- Innovation pool: similar to the Side Pool, but stablecoins in this pool are even more innovative. For example, this pool includes the algo-stablecoin FRAX, and the first regulated stablecoin TUSD. The main difference is that this pool’s token issuers will not provide extra emissions as liquidity incentives.
Innovation Pool Mechanism
Like the Side Pool, the Innovation Pool is an individual pool segregating risks. One more thing in common is that the Innovation Pool also has BUSD listed as a routing asset which enables inter-pool swapping, e.g. FRAX to HAY, TUSD to USDC, etc.
The single-sided pool design will remain unchanged. veWOM boosting will also apply to this pool. Each transaction will have a 0.1% of swap fee.
Pool emissions will be shared upon pool launch.
How does it ensure the safety and protection of users in case of a depeg?
Like with the Main & Side Pool, we’re not using a price oracle for the Innovation Pool as our algorithm assumes stablecoins to be pegged at $1. We make sure of the coverage ratio and fee structure to protect our users’ assets. This volatile asset class will be subject to a stricter coverage ratio and supply limits.
When the coverage ratio of the from-token (of the volatile asset) exceeds 1.5, a coverage ratio fee will be charged on top of the haircut to discourage users from swapping. In the event that the coverage ratio reaches the maximum limit, which is 1.8, a 100% fee is charged, meaning no further swaps will be permitted.
The Innovation Pool’s smart contract is well-engineered and passed Peckshield’s auditing. All known vulnerabilities were investigated and addressed before deployment to ensure comprehensive security.
Final Thoughts
Wombat’s Innovation Pool implements trending coins so users have more options. We are happy to bring in choice for our users with different pegging mechanism. Throwing risky tokens into the same pool where the well-established ones live can harm the exchange and its users. We bring you more stablecoins variety while minimizing risks for you.
For more detailed information on the mechanism, check out our V2 whitepaper: https://www.wombat.exchange/Wombat_Whitepaper_SidePool.pdf
About Wombat Exchange
Wombat Exchange is a multichain stableswap native on the BNB Chain, focused on re-engineering the stableswap experience with its innovative algorithm design as the next-generation stableswap 2.0.
Wombat’s vision is to fuel DeFi growth and push boundaries with greater capital efficiency, increased accessibility, and scalability, with the adoption in a multichain world. To learn more, visit wombat.exchange, or follow us on the social channels below:
