AMM V3

Arch's V3 AMM is based on Algebra's V1.9, a cutting-edge tick-based concentrated liquidity solution. For more comprehensive details, you can refer to their technical documentation and whitepaper

The AMM operates similarly to Univ3, with a range of custom features that enhance efficiency and performance. Among its general performance improvements on the vanilla Univ3 codebase, some major enhancements have been implemented, such as:

Customizable Tickspacing

V3 AMM gives users the ability to adjust tick spacing for each liquidity pool, offering unparalleled customization. This flexibility ensures that each pool operates with optimal efficiency, resulting in higher trading volumes and improved fee generation.

Directional & Dynamic Volatility Fees

V3 introduces a dynamic fee model that adjusts based on market volatility, leading to significant improvements in efficiency. The protocol automatically modifies the fees for each liquidity pool according to the current volatility, boosting both fee generation and trade volume.

A key feature of this system is the ability to set separate fee ranges for buying and selling, depending on the volatility. This allows each liquidity pool to offer fee structures that are finely tuned to the specific market conditions, ultimately increasing both fees and trading volume as the fees better reflect the market's risk profile.

When trading volume is low, the fees automatically decrease, preventing users from being burdened with excessive costs during quieter periods. On the other hand, when the market experiences higher volatility, the fees rise accordingly to account for the additional risk.