AMMs are widely used in the crypto industry and they all have a host of problems that cause liquidity providers issues, such as high gas fees, high price slippage, and significant impermanent losses.
In addition to these common AMM problems, AMMs on Cardano are comparatively less efficient than their counterparts in other ecosystems. Currently, users sometimes have to wait extended periods of time until a transaction is completed and the tokens are transferred into their wallets.
These problems are inconsistent with and contradictory to Cardano’s ambition to be one of the fastest-growing blockchains in the industry. The Cardano community is certainly one of the most enthusiastic crypto communities, which is all the more reason why the community deserves to finally get access to a superior AMM platform that outcompetes established solutions of other ecosystems.
Blueshift provides a completely new and highly user-friendly AMM model that revolutionizes trading and liquidity provision. Usually, liquidity is provided in pairs. This means that having only one type of a token is not sufficient to provide liquidity.
Firstly, one needs to trade parts of the available token (e.g. ADA) into another token (e.g. USDC) before the pair of ADA and USDC can be contributed as liquidity to a platform. This additional step comes with the same risks and potential losses of other trades and is often perceived as annoying by users. This is what we call DeFi 1.0, liquidity provision in pairs.
Introducing DeFi 2.0, Blueshift integrates various innovations, which allow users to simply provide liquidity with a single token. Instead of pairs and liquidity pools of two tokens, Blueshift uses liquidity portfolios of multiple tokens that liquidity providers can contribute to. This enhanced level of flexibility makes liquidity provision significantly easier and user-friendly.