Equilibrium-Core

A high-performance AMM implementing weighted asset exposure and bounded liquidity for stablecoins on Solana.

Overview

Equilibrium-Core is a hub-and-spoke AMM designed for stablecoin liquidity optimization. It implements:

• Weighted Asset Exposure: Maintains target weights (45% USDC, 35% USDT, 20% PYUSD) through arbitrage incentives
• Bounded Liquidity: Concentrates capital in the 0.99-1.01 price range for maximum efficiency
• Dynamic Fees: Adjusts swap fees based on pool imbalance to accelerate rebalancing

Built as a technical exploration of advanced AMM mechanics, Equilibrium-Core demonstrates how modern stablecoin pools can achieve superior capital efficiency while maintaining peg stability.

Key Features

Hub-and-Spoke Architecture

• Central USD* token acts as the hub for all swaps
• Isolates risk between partner stablecoins
• Enables efficient multi-hop routing

Weighted Asset Exposure

// Target weights for Seed Pool
const USDC_WEIGHT: f64 = 0.45;  // 45%
const USDT_WEIGHT: f64 = 0.35;  // 35%
const PYUSD_WEIGHT: f64 = 0.20; // 20%

// Check if pool needs rebalancing
fn needs_rebalance(&self) -> bool {
    let total_value = self.usdc + self.usdt + self.pyusd;
    
    let usdc_weight = self.usdc as f64 / total_value as f64;
    let usdt_weight = self.usdt as f64 / total_value as f64;
    let pyusd_weight = self.pyusd as f64 / total_value as f64;
    
    (usdc_weight - USDC_WEIGHT).abs() > 0.01 || 
    (usdt_weight - USDT_WEIGHT).abs() > 0.01 || 
    (pyusd_weight - PYUSD_WEIGHT).abs() > 0.01
}

Dynamic Fee Model

Fees automatically adjust based on pool imbalance:

• Base fee: 0.05%
• Maximum fee: 0.5%
• Fee increases proportionally to weight deviation

fn calculate_fee(&self) -> f64 {
    let base_fee = 0.0005; // 0.05%
    let max_fee = 0.005;   // 0.5%
    
    let total_value = self.usdc + self.usdt + self.pyusd;
    let usdc_weight = self.usdc as f64 / total_value as f64;
    let usdt_weight = self.usdt as f64 / total_value as f64;
    let pyusd_weight = self.pyusd as f64 / total_value as f64;
    
    let deviation = (usdc_weight - USDC_WEIGHT).abs() + 
                   (usdt_weight - USDT_WEIGHT).abs() + 
                   (pyusd_weight - PYUSD_WEIGHT).abs();
    
    (base_fee + deviation).min(max_fee)
}

Technical Architecture

Programs

• SeedPool: Manages the core liquidity pool with weighted exposure
• USDStar: Implements the hub token (USD*)
• Router: Handles optimal swap routing and fee calculation
• LiquidityManager: Handles LP deposits/withdrawals

Integration Points

• SPL Token: For creating test tokens (FAKE_USDC, FAKE_USDT, FAKE_PYUSD)

Development

Prerequisites

• Rust 1.68+
• Solana CLI 1.14+
• Anchor 0.27+

Setup

# Clone the repository
git clone https://github.com/yourusername/equilibrium-core.git
cd equilibrium-core

# Install dependencies
yarn install

# Build the program
anchor build

# Deploy to devnet
anchor deploy --provider.cluster devnet

Testing

# Run unit tests
anchor test

# Run integration tests on devnet
yarn test:devnet

Future Improvements

• Concentrated Liquidity: Implement tighter bounds (0.995-1.005) for even higher capital efficiency
• Cross-Chain Integration: Extend the hub-and-spoke model across multiple chains
• Risk Management: Add automatic hedging for partner stablecoins

License

This project is licensed under the MIT License - see the LICENSE file for details.

Acknowledgements

Inspired by innovations in modern AMM design, particularly weighted exposure mechanisms and bounded liquidity concepts pioneered by leading stablecoin protocols.