TTSWAP Constant Value 🆚 Constant Product --- TheBattle of Liquidity Design Intelligence
About 724 wordsAbout 2 min
2025-06-04
Hello everyone! Today we're diving deep into two different liquidity design approaches in the DeFi space: TTSWAP's constant value formula with its "multi-pool integration" solution and Constant Product Formula's "virtual liquidity" solution. Through comparison, you'll understand how they enhance user trading experiences in different ways.
Core Innovation Comparison
| Feature | TTSWAP Constant Value | Constant Product |
|---|---|---|
| Liquidity Design Philosophy | Multi-pool liquidity integration | Virtual liquidity (concentrated liquidity) |
| Implementation Method | Merge all token liquidity into one pool | Allow LPs to provide liquidity in specific price ranges |
| Main Advantage | Improve liquidity utilization | Improve capital efficiency |
| Suitable Scenarios | Multi-chain/multi-token trading environment | High volatility trading pairs |
1. TTSWAP Constant Value Multi-Pool Integration: Breaking Liquidity Silos
What is Multi-Pool Integration? Traditional cross-chain trading requires multiple independent liquidity pools, but this formula integrates all token liquidity into a unified "value pool."
How Does It Enhance Experience?
- Traditional Model: ETH/BTC trading requires ETH→USDT→BTC
- New Model: Direct ETH→BTC using unified value pool
- Liquidity Efficiency Improvement Diagram:
Traditional Model: Pool A(ETH/USDT) + Pool B(BTC/USDT) = Fragmented Liquidity New Model: Unified Pool(ETH+BTC+...) = Shared Liquidity - Result: If integrating 100 trading pairs, equivalent liquidity increases 100x across all ranges
User Benefits:
- Cross-chain trading completed in one step
- Reduced intermediate conversion losses
- Lower slippage for large trades
2. Constant Product Formula's Virtual Liquidity: Making Capital "Smart"
What is Virtual Liquidity? A revolutionary concept introduced by Constant Product Formula that allows liquidity providers (LPs) to concentrate their funds in specific price ranges rather than distributing them evenly across the entire price spectrum.
How Does It Enhance Experience?
- Example: Assume ETH current price is 3000 USDC
- Traditional Model: LP funds distributed across 0→∞ range
- New Model: LP can choose to provide liquidity only in the 2900-3100 range
- Result: Within the 2900-3100 range, equivalent liquidity increases 100x
User Benefits:
- Lower slippage in commonly used price ranges
- Traders get better quotes
- LPs earn higher fee returns
3. Deep Comparison: Pros and Cons of Both Approaches
TTSWAP Constant Value Multi-Pool Integration
Advantages: ✓ Simplified cross-chain trading process ✓ Liquidity sharing effects ✓ Automatic multi-token value balancing ✓ User-friendly for regular LPs, no impermanent loss
Disadvantages: × Higher learning curve for new mechanisms
Constant Product Formula Virtual Liquidity
Advantages: ✓ Extremely high capital efficiency (up to 4000x) ✓ Professional LPs can optimize returns ✓ Excellent depth for mainstream trading pairs
Disadvantages: × Not user-friendly for regular LPs × Requires active position management × Liquidity may become fragmented
4. Real-World Scenario Experience Comparison
Case Study: User wants to exchange 1 BTC for ETH
TTSWAP Constant Value Method:
- System automatically calculates BTC/ETH exchange rate
- Direct exchange from unified pool
- Pay one transaction fee
- Experience only one price slippage (no slippage for small orders)
Constant Product Method:
- Check BTC/USDC pool depth
- Check ETH/USDC pool depth
- Execute BTC→USDC→ETH
- Pay two transaction fees
- Experience two price slippages
Test Data Comparison (under assumed conditions):
- TTSWAP direct exchange: 1 BTC → 9.5 ETH
- Constant Product Formula path: 1 BTC → 28,500 USDC → 9.3 ETH
- Savings: Approximately 2% value preservation
5. Future Evolution Directions
TTSWAP Constant Value Formula Evolution:
- Enhanced functionality
- Strengthened operations
- Combined risk management
Constant Product Formula Development:
- More granular liquidity range divisions
- Dynamic fee tier adjustments
- LP tool ecosystem refinement
Key Insights
Both approaches essentially solve the liquidity efficiency problem, but through different paths:
- TTSWAP is "horizontal expansion": enabling liquidity sharing between different assets
- Constant Product Formula is "vertical deepening": making liquidity thicker in specific price ranges
Like urban transportation planning:
- TTSWAP is like building transfer hubs (seamless connection between different routes)
- Constant Product Formula is like building bus stops (transfers require different bus stations)
Summary
DeFi innovation never ends. TTSWAP's constant value multi-pool integration and Constant Product Formula's virtual liquidity represent two excellent approaches to enhancing user experience. As a user, understanding these underlying principles helps you:
- Choose the most suitable trading path
- More accurately estimate trading costs
- Discover optimal arbitrage opportunities
- Become a more savvy DeFi participant
Remember, there's no one-size-fits-all solution, only solutions best suited for specific scenarios. We hope this comparison helps you navigate the DeFi world with confidence!