A New Swap Paradigm
One of RadioShack liquidity-providers, Atlas USV, owns its own liquidity and other assets in its treasury — it doesn’t rent them. And the same goes for RadioShack LP tokens. And as discussed before, both RadioShack and its partner, Atlas USV, are long-term holders — not a reward-oriented, short-term provider of liquidity. This gives RadioShack a unique advantage: The liquidity is long-term — not fleeting.
Since liquidity removal is slow, the condition in Equation 1 is never satisfied, and therefore, the total liquidity pool level always increases and maxes out very slowly or never maxes out. The following graph shows RadioShack's LP Growth Curve in the extreme case of zero leakage (which is an extreme unlikely scenario, but shown here to amplify the stark difference between the two approaches):
Comparison of Zero Liquidity Removal Scenario vs DEX 1.0 (hypothetical scenario)
This means, if RadioShack surpasses a DEX 1.0’s liquidity level in a given token pair, it is expected to gain a competitive edge in swap efficiency given the fact that its liquidity is owned and therefore, liquidity removal is slow or negligible.
We expect the RadioShack Swap’s new owned liquidity accumulation model to beat DEX 1.0’s liquidity renting model over a long-enough time horizon.
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