An Automated Market Maker, Zircon Finance Launch A Mainnet Network
Zircon Finance has launched a mainnet network to solve investors problems related to temporary loss in decentralized finance (DeFi).
Zircon Finance is the decentralized exchange on Moonbeam with the lowest fees and impermanent loss mitigation powered by Pylon.
A Mainnet Network Called Zircon Gamma
The impermanent loss occurs when assets are lost that have previously been used to provide liquidity to a liquidity pool for earning yields.
The mainnet network, called Zircon Gamma, aims to fight losses via single-sided liquidity provided over the Moonriver network, where risks are divided between volatile and stable coins. Furthermore, the mainnet enables both parties to earn swap fees.
ETH, for example, gains twice as much as regular liquidity pools while still experiencing impermanent losses, according to Zircon. However, At least 90% of the risk can be reduced with AMM’s in-house Async LPing mechanism.
The Way Mechanism Works
In order to accomplish this, the mechanism incentivizes liquidity pools to restock lost ETH based on earned fees.
“Too many people got burned by teams making fantastic but misleading claims about removing or compensating impermanent loss. In some cases, the mechanism (involving dynamic fees) they offer just doesn’t really do anything.”
Shevchenko acknowledged the obvious failure conditions if a token falls to zero, but he argues that “but Zircon reduces it enough to make impermanent losses a non-issue. What’s more, we can weaponize it for creating options.”
The fail-safe mechanisms in Shevchenko’s product help rebalance the liquidity pools in comparison to existing players that pitch protection against temporary losses.
However, he suggested users do their research when choosing their trading pairs, “It’s an incentive-based economic system that you can expect to work 99% of the time.”
The unique selling point of Zircon is its ability to provide direct liquidity for stablecoins and lower swap fees in addition to protecting users from impermanent losses.
“Overall, we’re going to be the cheaper and more liquid option for swapping anything outside of really popular pairs on Uni V3,” said Shevchenko.
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