Pool Types

Raphael supports pool designs suited to different price relationships, and a single token pair can have more than one pool. Choosing the right design is the first decision every liquidity provider makes.

Stable pools

Stable pools are intended for assets expected to remain closely correlated, such as two stable-value assets or closely tracking representations of the same underlying asset.

Their idealised curve concentrates liquidity around parity:

$x^3y+xy^3=k$

Here, x and y are the decimal-normalised pool reserves and k is the invariant for the current pool state. This curve keeps slippage low near the expected relationship, but it does not guarantee that either asset will hold its target price.

Volatile pools

Volatile pools use the common constant-product curve:

$xy=k$

They are designed for pairs whose relative value can move substantially, and they remain the default choice for newly launched or freely floating assets.

The curve is an idealisation

The curve itself is expressed as an equality. During a swap, an implementation may check that the post-swap invariant is not lower than the pre-swap invariant after fees and rounding. That contract check should not be confused with the idealised curve equation.

Concentrated pools

Concentrated liquidity lets an LP allocate capital between lower and upper price bounds instead of across the entire curve. This can improve capital efficiency dramatically while the market is in range, but it adds active-management and out-of-range risk. Concentrated Liquidity covers ranges, ticks and position NFTs in detail.

Choosing a pool

Compare:

• token relationship and volatility;
• total and active liquidity;
• fee setting;
• historical volume;
• emissions and incentives;
• smart-contract version;
• position-management requirements.

warning

A pool type describes its pricing mechanics, not the safety or quality of its tokens. A well-designed pool can still hold a badly designed token.