QubitSwap: The Informational Edge in Decentralised Exchanges
Fuente:
arXiv
Guardado en:
| Autores principales: | , , |
|---|---|
| Formato: | Preprint |
| Publicado: |
2025
|
| Materias: | |
| Acceso en línea: | |
| Etiquetas: |
Agregar Etiqueta
Sin Etiquetas, Sea el primero en etiquetar este registro!
|
| _version_ | 1866917981122985984 |
|---|---|
| author | Scott-Simons, Oliver Tronn Colman, Chris FrostByte |
| author_facet | Scott-Simons, Oliver Tronn Colman, Chris FrostByte |
| contents | Decentralised exchanges (DEXs) have transformed trading by enabling trustless, permissionless transactions, yet they face significant challenges such as impermanent loss and slippage, which undermine profitability for liquidity providers and traders. In this paper, we introduce QubitSwap, an innovative DEX model designed to tackle these issues through a hybrid approach that integrates an external oracle price with internal pool dynamics. This is achieved via a parameter $z$, which governs the balance between these price sources, creating a flexible and adaptive pricing mechanism. Through rigorous mathematical analysis, we derive a novel reserve function and pricing model that substantially reduces impermanent loss and slippage compared to traditional DEX frameworks. Notably, our results show that as $z$ approaches 1, slippage approaches zero, enhancing trading stability. QubitSwap marks a novel approach in DEX design, delivering a more efficient and resilient platform. This work not only advances the theoretical foundations of decentralised finance but also provides actionable solutions for the broader DeFi ecosystem. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2504_06281 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | QubitSwap: The Informational Edge in Decentralised Exchanges Scott-Simons, Oliver Tronn Colman, Chris FrostByte Trading and Market Microstructure Mathematical Finance Decentralised exchanges (DEXs) have transformed trading by enabling trustless, permissionless transactions, yet they face significant challenges such as impermanent loss and slippage, which undermine profitability for liquidity providers and traders. In this paper, we introduce QubitSwap, an innovative DEX model designed to tackle these issues through a hybrid approach that integrates an external oracle price with internal pool dynamics. This is achieved via a parameter $z$, which governs the balance between these price sources, creating a flexible and adaptive pricing mechanism. Through rigorous mathematical analysis, we derive a novel reserve function and pricing model that substantially reduces impermanent loss and slippage compared to traditional DEX frameworks. Notably, our results show that as $z$ approaches 1, slippage approaches zero, enhancing trading stability. QubitSwap marks a novel approach in DEX design, delivering a more efficient and resilient platform. This work not only advances the theoretical foundations of decentralised finance but also provides actionable solutions for the broader DeFi ecosystem. |
| title | QubitSwap: The Informational Edge in Decentralised Exchanges |
| topic | Trading and Market Microstructure Mathematical Finance |
| url | https://arxiv.org/abs/2504.06281 |