Weighted Pools

Dexter will support a custom weighted pool AMM mechanism inspired by Balancer, which allows users to create a custom pool of assets and choose their weightage for each asset, such as pools with 60/40 or 60/20/20 weightage, in contrast to the constant product AMM mechanism, which only offers 50/50 weightage. This pool type supports up to 8 assets in a single pool.

Pools that weigh one token heavily significantly improve impermanent loss to the user compared to 50-50 pools. Impermanent loss is significantly less for highly imbalanced pools like 95/5, but this leads to high slippage due to low liquidity for one of the assets. Weighted pools allow users to customize their exposure to assets and maintain a balance in impermanent loss.

Weighted pools with more than two assets would allow traders to trade multiple combinations of assets on a single pool, saving them the swap fees to be paid on multiple swaps.