Community Finance Whitepaper
  • Whitepaper Overview
  • Roadmap
  • Protocol Overview
  • Basics
    • Welcome to Community Market
    • Useful Resources
  • Limitations on Current Stable-Swap Protocols
    • Impermanent Loss
    • Capital Inefficiencies
    • User Experience
    • User Benefits
  • Enhanced Features
    • Auto-Allocations
    • Auto-Balance
    • Auto-Compound
  • Stableswap Details
    • Asset Liability Management
    • Liquidity providers
    • Asset listing & Governance
  • RY - REALYIELD
    • Utility
    • Token Details
  • veRY - veREALYIELD
    • Utility
    • Token Details
  • Liquidity Mining
    • Liquidity Pool Fees
  • Incentives
    • Liquidity Incentives
    • Swap Incentives
    • Partner Program
  • How to use Community Market
    • Providing Liquidity
    • Swapping
      • Asset Swaps
      • Exchanging Tokens
    • Liquidity Mining
      • Preparatory Steps
      • Import $RY as a custom token
      • (I) Deposit and Staking LP Tokens
      • ​ (II) Collecting Rewards & Withdrawing Liquidity
      • Withdraw in other asset
      • (III) Stake Your NFT To Farm $veRY
  • NFT OVERVIEW
    • The Yield Ones
    • Collectible Value
    • Levels
    • Types
  • NFT Fundamentals
    • Web3
    • NFT Market
    • Ownership
    • The Future
  • FAQ
    • Frequently asked questions
      • What will be token for Community Market?
      • What markets is the $REALYIELD token traded on?
      • Other questions?
      • Which wallets can I use to swap on Market?
      • What happens if one of the coins in a pool loses its peg?
    • Other questions?
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  1. Stableswap Details

Asset Liability Management

The key concept underpinning Community Market sustainable design is asset liability management (ALM).

Most DeFi protocols today do not use the concept of liability, which makes it so that when you invest in a liquidity pool, the total asset composition of your investment can be significantly different when you withdraw from the pool.

This is very common on double-paired LPs. In this classic system, you are given "LP tokens" representing a share of the liquidity pool. This is a contributing factor to impermanent loss.

With the asset-liability system, what matters is the size of your investment and not the share of the pool your investment represents. The system keeps track of your investment liability, and you always own that amount at withdrawal.

The introduction of Asset Liability Management in the Community Market allows each pool to grow organically based on its natural supply and demand.

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Last updated 2 years ago