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MegaPools

Token pair liquidity pools that enable instant swaps on MegaFi. MegaPools use concentrated liquidity to achieve superior capital efficiency compared to traditional constant-product pools.

At a Glance​

  • One pool per token pair and fee tier combination
  • Concentrated liquidity model for capital efficiency
  • Real-time price updates as trades execute
  • Multiple fee tiers (0.05%, 0.3%, 1%) for different pair types
  • Permissionless pool creation for any ERC-20 pair
  • Liquidity aggregated across all provider positions

Pool Structure​

Each MegaPool consists of:

Token Pair: Two ERC-20 tokens that can be swapped (e.g., ETH/USDC).

Fee Tier: The trading fee percentage charged on swaps.

Liquidity: Total assets deposited by liquidity providers.

Price: Current exchange rate between the tokens, determined by pool balance and trades.

Tick Spacing: Granularity of Liquidity Zones. Lower tick spacing allows more precise ranges.

How Pricing Works​

MegaPools determine prices algorithmically based on pool reserves:

Before Swap: Pool has X amount of Token A and Y amount of Token B. Price = Y / X.

Swap Occurs: Trader deposits Token A, receives Token B.

After Swap: Pool now has more Token A, less Token B. Price adjusts automatically.

This constant feedback mechanism ensures prices track market conditions.

Price Formula​

MegaPools use the constant product formula with concentrated liquidity adjustments:

x * y = k (where k is constant within a Liquidity Zone)

However, unlike simple constant-product AMMs, this formula applies only within active Liquidity Zones. When price moves between zones, the formula parameters update.

Fee Tiers​

Different pool types use different fee tiers:

0.05% Fee Tier​

Use Case: Stablecoin pairs and highly correlated assets.

Examples: USDC/USDT, DAI/USDC, stETH/ETH

Rationale: Low volatility means less impermanent loss risk. Lower fees attract more volume.

Tick Spacing: 10 (allows very precise Liquidity Zones)

0.3% Fee Tier​

Use Case: Standard token pairs.

Examples: ETH/USDC, WBTC/ETH, LINK/ETH

Rationale: Balanced fee that compensates for moderate volatility while staying competitive.

Tick Spacing: 60

1% Fee Tier​

Use Case: Exotic or low-liquidity pairs.

Examples: New tokens, long-tail assets, highly volatile pairs

Rationale: Higher fee compensates liquidity providers for increased risk and lower volume.

Tick Spacing: 200

Pool Creation​

Anyone can create a new MegaPool:

  1. Select two tokens
  2. Choose fee tier
  3. Set initial price
  4. Add initial liquidity

The first liquidity provider sets the pool's starting price. Arbitrageurs quickly correct mispriced pools.

Requirements​

  • Both tokens must be ERC-20 compliant
  • Pool doesn't already exist for this pair and fee tier
  • Initial liquidity must be added
  • Small gas cost (~ $0.01)

Liquidity Distribution​

Within a MegaPool, liquidity is distributed across different Liquidity Zones:

Price:     $1800        $2000        $2200        $2400
           |            |            |            |
Provider A: [========================================]  (wide zone)
Provider B:              [===========]                 (narrow zone)
Provider C:         [======================]           (medium zone)

Each provider chooses their own zone. Total pool liquidity equals the sum of all active positions at the current price.

Real-Time Updates​

MegaETH's architecture enables true real-time pool updates:

Traditional Chains: Pool state updates every 12 seconds (block time). Price can drift between updates.

MegaETH: Pool state updates continuously as trades execute. Price always reflects the latest trade.

This eliminates toxic arbitrage opportunities and reduces MEV extraction.

Pool Statistics​

Each MegaPool displays key metrics:

Total Value Locked (TVL): Combined value of both tokens in the pool.

24h Volume: Trading volume over past 24 hours.

24h Fees: Total fees collected by LPs in past 24 hours.

APR: Annualized percentage return based on current fee rate.

Liquidity Distribution: Chart showing where liquidity is concentrated.

Price History: Historical price chart with volume overlay.

Multi-Pool Routing​

When no direct pool exists between two tokens, swaps route through multiple pools:

Example: Swapping LINK for USDC routes through LINK/ETH and ETH/USDC pools.

MegaFi's router automatically finds the most efficient path, considering:

  • Total fees across all hops
  • Price impact in each pool
  • Gas costs (minimal on MegaETH)

Concentrated Liquidity Advantages​

Traditional constant-product pools spread liquidity across all prices:

Capital Efficiency: Low. Most liquidity sits at prices that never trade.

Fee Earnings: Distributed equally regardless of where trading occurs.

Flexibility: None. LPs can't customize ranges.

MegaPools with concentrated liquidity:

Capital Efficiency: High. Liquidity concentrates where trades happen.

Fee Earnings: Focused. Active zones earn more per dollar of capital.

Flexibility: Full. Each LP chooses their optimal zone.

Result: 5-10x higher capital efficiency for well-positioned liquidity.

Pool Security​

MegaPools include several security features:

Reentrancy Guards: Prevent reentrancy attacks during swaps and liquidity modifications.

Price Bounds: Trades revert if price moves beyond expected bounds (slippage protection).

Oracle Integration: Secondary price feeds detect and prevent price manipulation.

Security: Smart contract audits planned before mainnet launch.

Security details →

Pool Analytics​

Track pool performance through the interface:

Volume Charts: Historical trading volume by day, week, or month.

Fee Charts: Fees earned over time.

Liquidity Charts: How liquidity distribution changes over time.

Price Charts: Historical price with technical indicators.

LP Leaderboard: Top liquidity providers by earnings.

Creating a Pool​

To create a new MegaPool:

  1. Navigate to "Pools" → "Create Pool"
  2. Select Token A and Token B
  3. Choose fee tier based on pair characteristics
  4. Set initial price (important - sets starting exchange rate)
  5. Add initial liquidity to activate pool
  6. Confirm transaction

Initial liquidity provider pays gas but receives LP NFT representing position.

Adding to Existing Pools​

To add liquidity to an existing pool:

  1. Browse pools or search for specific pair
  2. Click "Add Liquidity"
  3. Select Liquidity Zone boundaries
  4. Enter token amounts
  5. Confirm transaction

Detailed guide →

Pool Economics​

Pool profitability depends on several factors:

Volume: Higher volume means more fees collected.

Volatility: Higher volatility increases impermanent loss but may increase volume.

Liquidity: More liquidity means lower fees per LP but less slippage for traders.

Fee Tier: Higher fees mean more per trade but may reduce volume.

Optimal pools balance these factors based on token characteristics.

Performance on MegaETH​

MegaPools leverage MegaETH's capabilities:

Continuous Price Updates: No price drift between blocks.

Sub-10ms Swaps: Trades execute and finalize before traditional chains process one block.

Profitable Arbitrage: Ultra-low gas costs make even tiny arbitrage profitable, keeping prices efficient.

Real-Time Rebalancing: LPs can adjust positions multiple times per day economically.

FAQ​

Can I provide liquidity to just one side of a pool?
No. You must provide both tokens in proportion to the current price.

What happens if no one creates a pool for the pair I want?
Create it yourself. Pool creation is permissionless.

Can multiple pools exist for the same token pair?
Yes, if they use different fee tiers. For example, ETH/USDC can have 0.05%, 0.3%, and 1% pools simultaneously.

How are trading fees split among liquidity providers?
Proportionally based on liquidity contributed and time that liquidity was active.

Do I need both tokens to swap?
No. To swap Token A for Token B, you only need Token A.

Next Steps​

Learn more about MegaPool components:

Engineered for efficiency.