Ferro, a StableSwap AMM protocol, brings a more efficient way for users to exchange & farm tokens by creating more efficient pools consisting of highly correlated assets, such as stablecoin pools or native-wrapped token pools. Some of the advantages of Ferro over other DEXes can be described as below:
- Lower fees - Due to gas usage & traffic efficiency of the token swap/exchange mechanism versus normal DEX
- Lower slippages - Highly correlated assets reduce price divergence within tokens of the same pool
- Limited to no impermanent loss - Highly correlated assets reduces overall market exposures of the pools
- More utilization of pools - Highly correlated assets allow for more utilization, providing opportunities to benefit by deploying pools into other DeFi protocols.
The wide array of utility that a stable curve pool that Ferro offers, will also allow better composability between protocols in Cronos. For example, money market protocols can list their interest-bearing token in Ferro, while any lower liquidity stablecoins bridged from other chains can leverage the Meta Pool set up to bootstrap the liquidity.
In summary, the introduction of Ferro will bring myriad of benefits to the Cronos ecosystem:
- A more efficient way to access stablecoins & other highly correlated assets with lower fees & slippage
- Composable pools that provide additional utilities to different types of tokens (wrapped token, lending token, yield-bearing token)
- Means to bootstrap liquidity for newly bridged assets (e.g. new stablecoins)