2024-09-06 –, Masuria stage
Concentrated liquidity (aka "amplified" liquidity) refers to a specific transformation of the canonical constant product bonding curves first introduced in 2017. Concentrated liquidity protocols allow liquidity providers to quote prices with arbitrarily low rates of slippage compared to the constant product paradigm, with the caveat being that the available liquidity is enumerated over a specific, finite price interval as opposed to an infinite one.
Its most popular implementation is characterized by a large set of discrete, 2-dimensional price boundaries, from which liquidity providers may select a subset to contribute tokens into. Perhaps owing to its level of market saturation, it is now assumed that these design choices are synonymous with the concentrated liquidity general theory. This is not true.
With this talk, I aim to introduce a more fundamental understanding of concentrated liquidity theory, including its 1-dimensional and n-dimensional realizations, and its utility beyond the status quo in contemporary DeFi architecture.
Mark Bentley Richardson, holding a PhD from the University of Melbourne, redirected his career from research science to DeFi in 2021, now serving as Bancor's Project Lead. Under his guidance, Bancor launched Carbon DeFi, a system that enhances user customization in decentralized exchanges by enabling strategy-specific liquidity utilization. Richardson's leadership emphasizes consistent innovation while maintaining the key principles of decentralization, user safety, and operational simplicity.