The Increment protocol introduces an autonomous non-upgradable smart contract system that uses pooled collateral backed virtual assets for liquidity and leverages Curve V2's AMM (Automated Market Maker) for trade execution. It features:
Automatically concentrated liquidity. Liquidity is concentrated around the market price by means of Curve math, levelling the playing field for market makers and introduces a passive liquidity provision experience for all.
Dynamic fees. Trading fees are automatically set by the AMM (within a precise range determined through governance) depending on market conditions, which helps mitigate impermanent loss costs for liquidity providers.
Parametrizable pools. Pool parameters can be programmed by governance to fit more volatile assets as well as less volatile asset types.
Increment's architectural layout proposes an alternative solution to the construction of current onchain perpetual futures protocols and establishes a complete infrastructure for decentralized trading and a passive liquidity provision experience. Users can interact with the protocol in the following ways:
Traders can long or short listed perpetual markets with leverage
Liquidity providers can deposit funds to each market and act as passive market makers in exchange for trading fees
Liquidators can operate liquidation bots to liquidate underwater positions in exchange for a percentage of the position
Stakers can lock tokens to contribute to the safety of the protocol in exchange for insurance fees and rewards
Participants can contribute to governance and help decide the future of the protocol