SpookySwap V3 Launch Announcement

4 min readFeb 26, 2024

The Spooky team is proud to announce our V3 DEX is launching later this week on Horizen EON, Fantom and BitTorrent Chain! We appreciate our community’s feedback in determining our development priorities as we build new DeFi features into our popular UI/UX, and we’re excited to offer a new suite of tools for expert traders to maximize their efficiency through concentrated liquidity.

Concentrated Liquidity

Concentrated Liquidity offers higher capital efficiency for LP pairs, better execution for traders, and alternative infrastructure for DeFi liquidity. Investors will now be able to concentrate capital within custom price ranges on Spooky, providing greater liquidity at desired prices. In doing so, each LP can have an individualized price curve to reflect its staker’s preferences, such as with Stableswap Pools!

Stableswap Pools

Concentrated LPs specifically for stablecoin pairs can be created by SpookySwap users by selecting a narrow liquidity range when adding liquidity, greatly improving the capital efficiency and reducing the price impact of stablecoin trades. Traders will be able to swap a larger volume of stablecoins for a lesser price impact and slippage on the same amount of liquidity. This is just one possibility for the limitless options made available by concentrated liquidity pools which greatly improves the LP’s capital efficiency.

Capital Efficiency

Capital efficiency for LP pairs is greatly improved when the price range remains within the range determined by the concentrated position. You can earn a greater amount of fees than a traditional v2 position that earns fees regardless of the price range, allowing investors additional funds to invest in other strategies.

When market prices deviate beyond an LP’s predefined price range, their liquidity is effectively withdrawn from the pool and no longer generates fees. During this period, the liquidity consists entirely of the less valuable of the two assets. The liquidity remains in this state until market prices return within their specified range or the user chooses to adjust their range to reflect current prices.

This form of concentrated liquidity also works as a form of stop-loss, as in a worst case scenario of one fund in the LP pair falling to $0, a smaller amount of funds will have been lost, and the LP will still retain value as opposed to SpookySwap v2.

Non-Fungible Liquidity

An additional benefit to custom price ranges for LPs is that your liquidity position is no longer fungible, and not a transferable ERC20 token. By being represented by a non-fungible token (NFT), investors can tell the status of liquidity at a glance by looking at the beakers on their Spooky V3 LP NFT:

NFT types for out of range, closed, and in range LP

Fees

SpookySwap v3 provides liquidity providers with four distinct fee tiers per pair: 0.01%, 0.05%, 0.30%, and 1.00%. This range of options allows users to customize their margins based on the expected volatility of each pair. Liquidity providers take on higher risk in non-correlated pairs like FTM/USDC, while they assume minimal risk in correlated pairs like USDC/USDT.

While having separate fee tiers may result in some liquidity fragmentation, we anticipate that most pairs will naturally gravitate toward a specific fee tier, effectively establishing it as the canonical market. For instance, like-kind asset pairs are likely to cluster around the 0.05% fee tier, while pairs such as FTM/USDC may opt for the 0.30% fee. Exotic assets might find the 1.00% swap fees more suitable. Additionally, governance has the flexibility to introduce additional fee tiers as necessary.

Thank you to everyone who is part of the Spooky community. Expect SpookySwap V3 Concentrated Liquidity to go live this Wednesday, February 28th, around 5pm UTC. We look forward to having more great news to share with you soon on upcoming improvements to our V3 features. Tell us what upcoming DeFi features you’re excited about most, or provide any feedback for new utility to develop on Spooky through our Twitter, Discord, Telegram, or in our SpookySwap Subreddit.

About Spooky

SpookySwap is the top native decentralized exchange for the Fantom Opera network, now on Horizen EON and BitTorrent-Chain. Spooky has brought new capabilities to ETH-alternative networks such as being the first DEX to implement native limit orders outside of Ethereum and the first DEX to implement a bridge built into the interface.

SpookySwap is fully decentralized with governance by BOO being used to determine all new farms, single-stake pools, and farm weight adjustments. Spooky remains committed to improving user experience and DeFi utility.

Stay Spooky!