To address the need for ample liquidity for any swap volume and amount requested by MultiSwap users, several solutions are available.
Solutions for Ensuring Liquidity:
Fund Manager Native Liquidity (FMNL):
FMNL serves as the primary method to enable cross-chain swaps swiftly but faces limitations due to the capital available and the overhead involved in replenishing liquidity.
Liquidity Automated Replenishment Service (LARS):
Incorporated within FMNL, LARS manages liquidity by setting high and low thresholds. It withdraws excess liquidity when above the high threshold and replenishes it when it falls below the low threshold, ensuring optimal liquidity levels.
Cross-Chain Transfer Protocol (CCTP) by Circle:
CCTP enhances liquidity for cross-chain swaps, allowing for significantly larger swap amounts and volumes without the need for operational intervention in liquidity management.
Details on FMNL and LARS:
Swap Limits:
Maximum swap value: USDC 10,000
Settlement Time: Typically between 80 seconds and 2 minutes
Supported Chains: All integrated networks
LARS Thresholds:
High: USDC 10,000
Low: USDC 5,000
CCTP by Circle Insights:
Swap Capacities:
Enables self-funded liquidity for large-scale swaps, potentially worth over USDC 10 million.
Settlement Time: Approximately 8 to 20 minutes
Chain Availability: Limited to specific blockchains like Ethereum, Avalanche, and others, excluding BSC.
Benefits and Limitations of FMNL and CCTP:
FMNL provides rapid transaction capabilities and supports various chains but is constrained by liquidity availability and management.
CCTP allows for larger transactions without external liquidity support, though it may experience longer settlement times and has limited blockchain support.
Comparative Overview of FMNL and CCTP:
The comparison underlines CCTP's scalability and efficiency advantages, whereas FMNL offers broader blockchain compatibility but with liquidity and operational challenges.
MultiSwap Integration Strategy:
MultiSwap allows users to select between FMNL for faster transactions with smaller swap limits or CCTP for larger amounts, albeit with longer settlement times. This dual approach caters to diverse user requirements, ensuring continuous service across various blockchain networks, including those not supported by CCTP.
Routing Mechanism Explained:
Upon entering swap details, the FIBER Engine proposes the optimal swap route based on liquidity constraints. Users can choose between a faster FMNL route for smaller swaps or a CCTP route for larger amounts. The chosen route determines the fund flow, ensuring efficient and secure swap execution.