Unified Liquidity

[anilcse]

Since the protocol owned liquidity started becoming a norm now, it aligned with one of the ideas we were discussing internally.

For providing liquidity, till now we are depositing in LPs. All the swap mechanisms works with Pool's logic internally. For that, each DEX needs to fight to get liquidity by providing better incentives for token holders/liquidity providers. On the other hand, liquidity providers need to chose between the different protocols for providing their liquidity.
But think about solving this UX issue by enabling chain-owned liquidity solution.

For example, cosmoshub will have a global ATOM Pool and pairing tokens. Something like this,

type TokenPair struct {
	Denom                       string   `json:"denom"`
	MaxLiquidityForPair float64 `json:"max_liquidity_for_the_pair"`
	LpShares                   string   `json:"lp_shares"`
}

type UnifiedLiquidity struct {
	BaseTokenDenom         string          `json:"input_token"`
	AvailableLiquidity          uint64         `json:"available_liquidity"`
	TokenPairs                     []TokenPair `json:"liquidity_tokens"`
}

The data storage will be something like this always summing to 100%

// Initialize InputData with the provided data
data := UnifiedLiquidity{
  BaseTokenDenom  :  "uatom",
  AvailableLiquidity   : 10000000,
  TokenPairs              : []TokenPair{
    {
      Denom                      :  "uosmo",
      MaxLiquidityForPair :  0.3,
      LpShares                   :  "gamm/44/0.1117282234444444",
    },
    {
      Denom                      :  "uakt",
      MaxLiquidityForPair : 0.3,
      LpShares                   : "gamm/44/0.1117282234444444",
    },
    ...
  },
}

The new ibc-app enables two way control (extended ICA but controlled by governance), or even we can utilize current ICA on different chains to access a portion of the liquidity on the CosmosHub (and such that any network).
The protocols such as Osmosis, will have access to the liquidity on CosmosHub. Whenever there's a swap/lending request on Osmosis,
it will utilize required ATOM from the UnifiedPool from CosmosHub. This basically solves 2 problems.

• Allows ATOM holders to provide liquidity from the CosmosHub itself.
• Liquidity providers doesn't need to chose among different protocols for liquidity. Instead the decision is made by
  all the providers/gov on the hub. This allows LP providers to share the equal swap-fees so it solves
  the knowledge problem for LP providers.
• It will be easy for the LP pairs to get deeper liquidity of ATOM (so LP providers doesn't need to chose
  protocols such as Osmosis, Neutron)

[diggler30100]

awesome