Integrating Algebra’s ‘Integral’ will enable the implementation of a modular-based architecture, allowing the ability to add plugins on top of liquidity pools without liquidity migration, enabling external projects and independent developers to implement their ideas and features as plugins within the Sushi ecosystem.
Existing technology inside DEXes can quickly become outdated, failing to keep pace with DeFi trends, resulting in low liquidity effectiveness, ensuring rapid evolution in the DEX space; a solution is essential to expand functionality in line with market trends. New solutions and algorithms have emerged for more efficient liquidity management, dynamic fee adjustments, and trading possibilities in recent years.
For timely access to these innovations, we propose deploying Algebra’s Integral, the leading concentrated liquidity engine with a unique modular architecture, providing an effective solution to the above challenges with a light core with key functionalities & custom plugins.
The concept of Algebra’s Integral separates pools and added functionality, employing a modular architecture. Integral represents a modern approach to concentrated liquidity, enabling the seamless integration of plugins on top of liquidity pools.
By integrating the Algebra technology, Sush will become one of the pioneering DEXes with the ability to collaborate with external developers to build plugins and update its DEX platform without any disruption for users, not to mention the gas efficiency for all, achieved with many features Algebra offers.
Algebra’s primary motivation is to create a platform for projects to bring their innovative ideas to life, and this collaboration has the potential to transform the DeFi landscape, offering more than just a DEX engine but an entire infrastructure.
Algebra ‘Integral’ is an advanced solution for decentralized exchanges that introduces a Modular Architecture with custom plugins, reinventing how DEXes operate. Integral divides the previously monolithic infrastructure into two essential components: the Core Codebase and Plugins, which play a crucial role in enhancing the efficiency, security, and adaptability of DEXes, competing with the Uniswap V4 approach.
The Core code of Integral is the heart of the platform, hosting the fundamental features necessary for DEX key functionality. It manages liquidity pools and the basic mechanics of DEX operations, serving as an immutable and unchangeable core to ensure the security of users’ funds. This Core code minimizes gas wastage, streamlining gas costs and increasing efficiency. Read more here.
In Integral, plugins expand DEX functionality & address the codebase’s inflexibility issues. These custom plugins introduce features like Dynamic Fees and On-chain Farming, empowering DEX DAOs to tailor functionalities to their needs. Updates are hassle-free, and no liquidity migration is required, offering adaptability to DeFi trends.
Integral also includes ready-to-use Plugins: TWAP Oracle for historical data, Volatility-based fees, and Farming for seamless functionality.
A volatility-based (Dynamic) Fee Plugin boosts commission earnings for LPs by up to 20% through an algorithm that adjusts fees based on risk, volatility, trading, and pool volume, minimizing price slippage and impermanent loss for Liquidity Providers.
Built-in On-chain Farming Plugin lets users earn rewards directly within the DEX, eliminating the need for external platforms. Available as an Integral plugin, it enhances profit opportunities.
The Limit Orders Plugin lets users place limit orders that automatically execute when they reach a specified price (no external calls required).
Learn about how our plugins operate on top of a liquidity pool here.
Integral’s innovative approach to DEX architecture and its extensible plugin system pave the way for future developments, including the introduction of the following features:
Dynamic & elastic fees
A whitelist/blacklist / KYC system
Gas discount or compensation mechanisms
Solutions for JIT liquidity issues
LVR (Loss-Versus-Rebalancing) / Impermanent Loss Reduction
And even more in the future.
For more detailed technical details, visit this link.
The implementation of Algebra Integral technology offers Sushi numerous advantages. The final goal of this integration is a significant increase in increase in TVL, trading volume, and overall efficiency, which the platform’s revenue growth will follow:
Integral’s optimized core saves 7-22% on gas costs on average compared to Uniswap V3.
Modularity & Customizability:
Plugins make it possible to implement new functions without liquidity migration, allowing Sushi to remain at the top of its competitiveness. Integral’s customizability allows Sushi to optimize its performance for each blockchain. This adaptability is crucial, given that Sushi operates on 25+ networks.
The Plugin Marketplace:
Sushi becomes a hub for external developers to showcase their ideas and solutions, fostering innovation within the DeFi community.
New Revenue Streams:
Integral unlocks a broader range of revenue opportunities. The introduction of plugins provides chances for more stakeholders to engage. Imagine, for instance, dedicated plugins for automatic buybacks, exclusive LP fee structures for entry/exit, giving them 100% of fees, or even plugins to mitigate impermanent loss.
We are sure that Plugins (or Hooks) Markets will be one of the main trends for 2024. The entry threshold to the DeFi market will fall significantly, increasing competition: instead of developing a whole protocol, a team or an individual can develop a Plugin, offer it to the platform, and get their share of fees.
Plugins gain access to the liquidity pool on a more surface level than protocols, which allows for quick implementation of new ideas – custom ways of fee calculation, Liquidity management, Flash loans, Perps, Subscriptions, ALM, or any other features that can change the approach to DeFi trading.
We envision Sushi, collaborating with Algebra Integral, as the catalyst for change — a dynamic marketplace for plugins/hooks, equipping builders with the tools to bring their products to life. Imagine a platform filled with plugins & cutting-edge features tailored for blockchains, DEXes, and various projects, created BY and FOR the community, all packed into the Sushi platform. Think of it as your local DeFi Plugin AppStore!
This initiative fosters innovation and competition in the emerging DeFi market, benefiting the Sushi community and expanding its influence to all blockchain networks Sushi operates on or plans to operate. For instance, Algebra is leading the way by developing plugins and partnering with friendly projects.
Developers can seamlessly transform their solutions into plugins as the V4 concept gains traction. This approach simplifies integrations, making it as easy as plugging in the desired solution on top of existing infrastructure.
To access Integral, Sushi will acquire a license fee of $15,000 for the initial integration on one chain and $7,500 for each additional chain. Protocol’s fees for SUSHI and Algebra will be set at 85/15 ratio for every pool.
Algebra will provide support for integration, including codebase and all the necessary resources. The collaboration will also include the joint development of the Plugin Marketplace concept, which is to be embraced by the Sushi ecosystem.
The main competitor of Integral will be Uniswap V4, with the same modular concept. Because of the business license, it will be impossible to fork it, currently making only Algebra Integral-based DEXes and Uniswap V4 competing. Here is how V4 and Integral differentiate from each other:
Integral was launched on October 10th and integrated into the Swapsicle DEX on two chains: Telos and Mantle. This partnership has already resulted in over $1 million TVL and has garnered the attention of other projects looking to build on top of Integral. Several more partners will deploy on Integral in the coming months.
Integral, which has undergone audits by partners, is already making waves in the DeFi community. The core functionalities of Integral have been thoroughly tested and are ready for use, and thousands of users have tested the custom plugins.
Algebra is a dedicated team specializing in research and development within the Automated Market Makers (AMM) space. In 2021, as a DEX solutions team, we made a significant impact by launching the first decentralized exchange with improved dynamic fees and built-in farming features, distinguishing itself from other platforms.
Algebra has established partnerships with over 25 decentralized exchanges, encompassing notable names like QuickSwap, THENA, Camelot and others. This collaboration has resulted in a total TVL of $150 million, and they are continuously expanding their network of partners.
At present, Algebra is a technology leader. Even before the launch of Integral, our prior iteration, Algebra V3, had already achieved remarkable success and held a prominent position on various networks, including Polygon, Arbitrum, Polkadot, BNB, and more.
We have empowered over 60 projects, including ALMs, cross-chain aggregators, and more, with cutting-edge technology integrated via Algebra-powered DEXes. The Algebra ecosystem aims to bring innovation and healthy competition to the DEX market, offering modern DeFi solutions like the Concentrated Liquidity codebase, including V3 & V4-like Integral, for reshaping any blockchain’s DEX landscape.
Algebra’s objective is to enhance Sushi’s collaborations with external development companies capable of offering their technologies in the form of plugins or hooks, easily integrated into the Algebra Integral codebase. The vision is for the Sushi platform to become more extensible by incorporating innovative ideas and technologies from partners, including ALMs, yield farming protocols, and much more.
Thus, the proposal aims to bring Sushi into a new era of decentralized exchanges by implementing the Algebra Integral technology.