BOW (Liquidity Engine)
Kujira's Revolutionary Liquidity Hub
BOW is Kujira's latest product, a framework that ensures optimal trading conditions for pairs on FIN, Kujira's on-chain orderbook DEX. It aims to attract liquidity providers by offering yield for adding to the depth of a given trading pair, which narrows the price spread and ensures deep order books for traders. BOW also enables protocols to further incentivize pool depth by allocating token rewards to liquidity providers.
BOW uses an internal algorithm to automatically place orders on FIN pairs based on its own internal token balances, similar to the XYK algorithm used by Automated Market Makers like Uniswap. As market buys and sells come in, these orders are filled, causing the contract's internal price calculation to move and re-submit orders at the new mid-market rate. BOW is a self-sufficient and 100% on-chain market maker for the FIN order book.
To use BOW, connect your wallet to the Pools tab and top up on the Swap tab if necessary. Choose the pool you'd like to participate in, deposit the desired amount of tokens, and create liquidity provider (LP) tokens. Holding LP tokens earns you a share of the fees from transactions using that pair, which can be further increased by staking the LP tokens on the Stake tab.
BOW offers several benefits to the ecosystem, including an on-chain solution for market making that doesn't rely on a third party and the ability to incentivize pool depth through fees and rewards. It also provides a stable and deep order book for traders, leading to higher volume and stability.