[RFC] Algebra x Sushi: Bringing Algebra Integral (V4) to Sushi

[Vladimir_Algebra]

Proposal Details

Proposal Summary

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.

Proposal Overview

Existing technology inside DEXes can quickly become outdated, failing to keep pace with DeFi trends, resulting in low liquidity effectiveness, ensuring rapid evolution in the DEX space; a solution is essential to expand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.

So, what’s it going to mean for the Sushi community?

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.

About Algebra Integral

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.

Let’s break it down further:

• 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

• Perpetual Contracts

And even more in the future.

For more detailed technical details, visit this link.

Benefits for Sushi

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:

• Gas Efficiency:

  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.

  

The Plugin Marketplace on Sushi Platform

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.

Partnership terms

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.

Integral vs. Uniswap V4

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:

Additional Information

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.

About Algebra Labs

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.

Conclusion

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.

Links:

• Algebra Website

• DeFiLlama

• Integral documentation

• Algebra Integral: Plugins Technical Overview

• Algebra Integral: The All-Plugged DEX Revolution

• Twitter

• Telegram

• Blog

Should Sushi go with Algebra Integral to build the Plugin/Hooks Market within the Sushi platform?

• For

• Against

[wainotte]

noice
is there a possibility of testing it out before integration tho? where can i see how this integral tech works?

[onlyHuman]

As a user of multiple dapps built using Algebra Integral, I have to admit the experience is incredible.

Sushi will benefit so much from that!

[Vladimir_Algebra]

Hi @wainotte, thanks for the question. Integral was launched one month ago and integrated into the Swapsicle DEX on two chains: Telos and Mantle. Integral is a set of smart contracts, UI was created by DEX.

[shmoneyy]

This technology will make Sushi better than Uniswap V4. Its amazing how Integral is better than uni V4 on all metrics and when plugins (hooks) are integrated, you don’t even need to create a new pool unlike in uni. No brainer for me

[RAHATSEN]

All improvements look impressive!!!

[makeitmove]

Looks like a no-brainer for me - let’s go!

[mountain_goat]

Is there anyone monitoring sushi forum for manipulation? Most of the above votes are new members that read 2 minutes.

I guess they must be very fast readers to find this post so quickly and then thoroughly read it within two minutes flat.

@jaredgrey you seem to have control of this so I wanted to point out the issue to you, albeit it’s not an ideal situation either to have the ‘ceo’ of ops group controlling the ‘democratic’ process and/or narrative.

I appreciate that you and captgeeky are supporting this and have emojis on lots of the above posts to reinforce that support so I guess it’s ok to let the manipulation happen for this one. But if yourself, David and the team didn’t like it - then surely it would be a problem

In the past this was exploited and it’s not representative of a DAO or fair governance.

All factors that are leading to an all time low engagement here. Is nobody noticing this?

[jaredgrey]

The Algebra team shared the post with their Discord community. The new accounts are from their community. Vladimir is the founder and posted above. You’re welcome to address him for confirmation. If you think it’s an unfair representation, we can remove them. FWIW, I support the Algebra AMM product as a way for Sushi to revive its AMM product dev and unlock new business opportunities.

[mountain_goat]

I don’t support any community being able to pour in and vote en masse without even spending enough physical time here to find and read the post.

Nor should you, regardless of whether they vote in line with your opinion. The point of our forum is to measure sushi community’s opinion afaik?

Are you the moderator here now or is there community members in control? It doesn’t seem fit for purpose if the ops team ‘ceo’ or ops team alone can control our parliamentary processes without overview.

Can you see the issue with legitimacy? How can you or the team fairly patrol a vote or discussion on your futures when capable of deleting the discussion before it starts.

Not really fit for purpose in current form. We had many issues here with Omakase while he was modding. Human nature

[jaredgrey]

I’m one of several contributors with forum access. I support Algebra’s tech. Please don’t confuse my support of their tech with the account raid. We’ll audit the poll and remove the questionable accounts.

[mountain_goat]

That’s a great start. It should be standard practice to audit all of these and cut out the silly manipulation by external forces.

The forum is becoming a bit pointless as a result. So thanks for taking it upon yourself to audit that.

Can you link me to the list of moderators or even list them here. Any community DAO members I knew that had access no longer do afaik

If there is no list can you write it here

[jaredgrey]

Agree. We’ll keep a more vigilant eye on the polls and make sure it’s genuinely representative.

Current mod list: Maki, Tangle, Truda, Zapa, Jiro, ImSoftware, Lufy, and Myself - would happily advocate for adding Nick or other actively contributing community members, like Dusknight.

[mountain_goat]

thanks for advocating for your chosen community members but that misses the point completely.

They are all paid team members asides from tangle and 0xmaki. @0xMaki has never moderated as far as I can remember but if he did it was not accessible to the community through him.

Tangle left sushi a long time ago so even from security pov it needs house keeping.

Hypothetically speaking if the DAO suspects the team is manipulating voting or discussion here the only supervisors we can complain to are team members.

It’s not democratic and it’s not fit for purpose. One arm of the DAO has complete control of ops funds (ops wallet), voting/discussion (forum), and voting (snapshot).

There is literally no way to try question the team or vote for another way while free of influence or team bias, without the permission of ceo and team.

The team veto was supposed to protect against malicious governance attacks while in practice it actually prevents us from ever refreshing the team going towards. Discussions won’t even get out of the traps let alone a snapshot vote.

Some system to allow for a no confidence vote should be implemented to counteract this - fully free from ops team involvement

[jaredgrey]

I suggested some community members. Anyone is available for advocacy from anyone in the community. I am not choosing or excluding anyone in particular. I only gave examples. Please provide your list if that suits you and discuss it freely with other community members. FWIW, Tangle, and Maki still participate in the DAO and hold advisory roles. I think there is no OpSec requirement to remove them from the admin roster. And you and anyone else are welcome to question the operations team. But, it seems this conversation has detered from the original post’s goals: whether Algebra’s technology is a valuable addition to Sushi’s product stack. As a DAO participant and community member, it would be great to hear your feedback on Algebra’s proposed solution.

[Drah]

Hi,
I’ll answer as one of the “new members that read 2 minutes” since I registered on the forum to vote on this. Registering to vote on this proposal doesn’t mean I (and probably some of the other voters) didn’t take the time to read other posts, even if we didn’t comment on it. However with 20 replies for 3k views on new sushi tokenomics for instance, I believe most people don’t feel the need to register.
During last bullrun, I was using Sushiswap a lot (both for swaps and as a liquidity provider), mostly on Polygon, Fantom and Gnosis, and then later on Arbitrum, and I was holding quite a bit of sushi tokens. I mostly moved away from Sushiswap due to the efficiency of new dexes (Quickswap v3 on Polygon, and then later Camelot on Arbitrum; never been a big fan of Uniswap because I think their tokenomics are disrespectful for their community). And guess what, both Quickswap and Camelot are using Algebra’s tech. So quite obviously, when I learned that what used to be my main dex was voting to use the same technology, I registered to vote.

Correct me if I’m wrong, but I guess there will be a snapshot vote later anyway. So yeah, I understand that you may think “new users are not representative of Sushiswap community”, but isn’t the point of such an integration to broaden your community?

[wainotte]

the sushi community members be like ‘i dont like a vote en masse thing’ and then literally ignore most of the proposals here lol
how about actively participating in the Sushi’s future instead of just expressing opinions without action? imo, it’s crucial for the entire community to collectively voice their opinions

[CryptoLamer]

@Vladimir_Algebra , can you please explain in some details the main differences between Algebra Integral and BentoBox?

[mountain_goat]

Not looking to get into hostilities with a visiting community. But it’s worth noting that if you click a username it gives you their history here. Minutes read etc etc.

The lack of engagement both here and in discord is indeed tragic and something the current custodians such as Jared should review.

By all means I stand over the issue with a bunch of new users from a certain community pouring in for a circle jerk. Have a look back at my history or any old community members. Frog nation governance attack/takeover a good starting point.

Thanks for your contribution and welcome to sushi. We need new blood here, but not manipulated polls and voting

Edit: Jared where’s my love heart emoji? You are reserving them all for others?

[Adam_Algebra]

Hey!

BentoBox and Integral are two distinct solutions. BentoBox serves as a token vault, while Integral represents an AMM modular version of Algebra.

The strength of Algebra Integral lies in its customizable plugins, allowing users to adapt the DEX’s functionality based on market conditions and implement interactions not possible in traditional architecture.

This flexibility streamlines experimentation within the extensive AMM design space, potentially eliminating the need for painful liquidity migration.

Plugins are used to execute specific functions in response to pool events such as initialization, liquidity minting or burning, swaps, and flash loans.