About LAMM

LAMM is the first permissionless protocol to list and trade any ERC20 token with leverage

Just as Uniswap first popularized AMMs to make any token tradable, LAMM's is designed to make any token tradable with leverage.

Trading

As long as the liquidity exists, traders can long or short any token with leverage. The maximum available leverage depends on how concentrated is the supplied liquidity. The frontend displays a familiar and simplified perp like UI for the trader. More details are in the Trade page.

Earning

When providing liquidity, the LAMM protocol ensures that the LP earns higher yield while experiencing no higher impermanent loss compared to the underlying AMM (Uniswap v3 or alike). Until the liquidity is borrowed for leverage trading, the supplied liquidity is used for swapping in the AMM by default.

While the liquidity is borrowed, it is generating the same yield as if the liquidity were still used for swapping, together with a position fee. This process is called liquidity restaking. The borrowed liquidity is locked for at most 3 days with liquidity reclaiming. More details are in the Earn page.

Features

No price oracle. Since each leverage position is mathematically guaranteed to make the LP position whole, the LAMM protocol does not rely on any price oracle. This eliminates the risk of price oracle manipulation.

No forced liquidation. As there is no price oracle, the LAMM protocol does not impose price based liquidation. Instead, the protocol uses a premium model, similar to the fixed term borrowing. As a result, a position won't necessarily be liquidated, even if the price moves in an undesirable direction. More details are in the Liquidation page.

No counter party risk. Unlike other perp DEXs, where a large portion of the PnL comes from the inverse PnL of the counter trading party, the PnL of LAMM comes directly from the price increase/decrease of the underlying asset. Therefore, even in extreme market conditions with skewed long/short ratio, as long as there exists liquidity, positive returns are obtainable.

For more mathematical details and the mechanism behind the protocol, check out this whitepaper.