Key Point #2
Last updated
Last updated
Key Point #2: The 1:0.5 ratio
If, for example, you plan to deploy $100k USD on an FXPool, we recommend having $50k USD of external liquidity elsewhere to ensure that as the FXPool trades towards the end of the beta region, arbitrageurs will have a venue to bring the FXPool back or closer to the 50:50 LP ratio.
Examples (with FX rates at time of writing):
| FXPool TVL | External Pool TVL | Good for Organic Trading |
|---|---|---|
$100k USD on a XSGD:USDC FXPool
$50k USD on an XSGD:USDC Uni v3 or Curve pool (whether paired against stablecoins or volatile tokens)
50k USDC and ~68k XSGD
25k USDC and ~34k XSGD or 25k USD worth of ETH and ~34k XSGD
10k USDC and ~9.4k EUROC
5k USDC and ~4.7k EURC or 5k USD worth of ETH and ~4.7k EURC
5k USDC and ~4.7k EUROC
10k USDC and ~9.4k EURC or 10k USD of ETH and ~9.4k EURC
because the external pool should be at least 50% of the FXPool
50k USDC and ~68k XSGD
1k USDC and ~1.36k XSGD or 1k USD of ETH and ~1.36k XSGD
because there isn't enough external liquidity to rebalance the FXPool once it crosses the beta region (25:75 or 75:25 in current parameters)