The SUBFROST AMM Is Live
The same swap screen, better execution and flexibility, and one transaction to bring your Oyl LP across to SUBFROST.
Today we are happy to announce our new SUBFROST AMM, and with it brings a new wave of improvements to the Alkanes ecosystem.
Any Alkanes token can now have a pool that SUBFROST supports.
You trade the same way you already do, and if you hold Oyl LP, one transaction moves it across.
Why we built an AMM when we already have the Oyl AMM
1. We could not collect the fee. The Oyl protocol fee can only be claimed with an admin token that was burned when the company dissolved. Every swap across our apps that routed through the Oyl AMM paid a fee that we never received and which didn't benefit anyone.
2. We could not upgrade the contract even if we wanted to. A bug in a pool is a bug we have no way to repair. We have no access to improve the Oyl contracts should we need to.
3. An AMM is fundamental to an ecosystem. Although Alkanes is proving to be the winner in the Bitcoin DeFi competition, and the Oyl AMM has $15M+ of liquidity already, these are small numbers compared to the potential of Bitcoin DeFi. Having no control over the core AMM of an ecosystem will limit us in the future. For example, with the Oyl AMM it is currently impossible to launch fee-driven incentive structures.
So we built our own.
What the SUBFROST AMM does better
The SUBFROST AMM is a rewrite, not a fork of Oyl.
1. The fee beyond the LPs has a destination. 1.0% of every swap lands in two buckets the ecosystem directs, covered below.
2. Each pool can belong to its project. A project that launches a pool can be handed that pool's own fee token to collect that pool's non-LP fees. This is not something that we are opening to other projects immediately, but this is an example of flexibility.
3. It can be maintained and upgraded. Admin rights belong to whoever holds the SUBFROSTAMM-SIGIL. This means that improvements can be made to the AMM, and bugs can be fixed instead of living with them. As Alkanes continues to grow rapidly and exciting innovations happen here and on other blockchains, we can adopt the innovations rather than being stuck with an archaic AMM.
Swapping works the way it always has
Nothing about how you swap changes. Pick what you send, pick what you receive, type an amount, and sign one Bitcoin transaction.
The webapp decides which AMM fills each trade. The swap details name the result under Venue, SUBFROST for the new AMM or Oyl for the old one.
You never have to choose an AMM. The webapp chooses the best one for you.
Adding liquidity works the same way as it always has, except now every new position goes to the SUBFROST AMM. Anyone can open a pool: the first deposit creates it and sets its price.
Any Alkanes token can now trade
Until now the webapp only listed a curated set of 15 tokens. Now any Alkanes token can have a pool, and every token with a SUBFROST AMM pool now shows up across our apps.
A new pool has to hold more than a small minimum before the webapp routes a swap through it to avoid malicious intents, so a fresh pool needs liquidity before it needs traders.
The only tokens kept out of the webapp are blacklisted (scam) tokens, posing as BTC, frBTC, frUSD, or the bridged stablecoins. We also blacklist tokens posing to be well-known project tokens, such as FUEL, FIRE, CHEESE, etc.
Three fees, each with a job
Every swap on the SUBFROST AMM pays 1.5% by default, in three equal parts. This is higher than the 1% fee paid through the Oyl AMM, but the extra 0.5% we believe is worthwhile.
0.5% to liquidity providers. It stays in the pool and raises the value of every LP token, the same way the 0.8% LP fee works on Oyl, though less.
0.5% to the protocol. Reserved for the buyback and burn of FUEL, SUBFROST's governance token, which has not launched yet. Until it does, this share accrues in each pool. Oyl charges 0.2% but then keeps it out of reach.
0.5% to the season. A rotating mandate, pointed at a different target each season, covered below. This is the net-new fee for synergies and incentives.
The webapp sends token-to-token trades to the SUBFROST AMM wherever it has a pool, even when Oyl would quote better, and the transaction details make this clear when the Oyl AMM would pay 5%+ more. On the deepest Oyl pool, DIESEL/frBTC, the deeper pool wins so volume there follows liquidity.
The season fee
The 0.5% season fee is pointed at a new target each season. Here are some examples:
1. Buy and burn FIRE. The season's share is set aside to buy FIRE and burn it, taking it out of circulation for good.
2. Buy and burn DIESEL. The same mechanism, pointed at DIESEL, so trading volume on every pool turns into buying pressure on DIESEL.
3. Direct the fees to cFIRE holders. Instead of burning, the season's share goes into the cFIRE vault, alongside the exit fees that already accrue to whoever stays.
The protocol fee's job does not change. The season fee's does, and it changes without touching the contract. Ensuring the highest security practices. Today the SUBFROST team sets each season; which will likely move to a vote in the future.
Moving your Oyl LP takes one transaction
If you hold LP on the Oyl AMM, we encourage you to move it over to SUBFROST.
On the "Migrate" tab within the Liquidity screen of the webapp, one Bitcoin transaction withdraws your whole position from Oyl and deposits it into the matching SUBFROST AMM pool.
When the two pools price the pair slightly differently, whatever does not fit the new pool's ratio comes back to your wallet in the same transaction. The transaction checks that you receive at least the LP you were quoted within your slippage.
If the SUBFROST AMM has no pool for your pair yet, the webapp tells you, and the position can migrate as soon as someone creates one.
LP staked in the FIRE vault is a separate case. It sits inside the FIRE contracts, not in your wallet. If a governance vote on sigil.vote approves it, we will migrate this DIESEL/frBTC LP for users through an upgrade of the FIRE contracts. You wouldn't need to do anything, and your staked LP keeps earning where it is.
Nothing forces the move. Oyl LP keeps earning on whatever still trades there, but we expect Oyl LP will begin to see less volume so we encourage you to migrate.
What is live today
The SUBFROST AMM contracts have been quietly tested on Bitcoin mainnet since September 8th. Token-to-token swaps, adding and removing liquidity, creating a pool, and migrating Oyl LP are in the SUBFROST webapp now. Zapping BTC straight into a pool is not yet ready.
Same screen, same single signature. What changed is the fee and our ability to upgrade the AMM and drive productive behavior for Alkanes with it.
