# Ecosystem Koi Finance is part of a small product line built by the same team. Each product serves a different chain and use case. ### Mute Mute was the earlier zkSync DeFi brand. Core protocol work continues under Koi Finance. ### Koi Finance Koi Finance is our zkSync DeFi platform — swap, liquidity pools, farming, bonds, and veDAO governance. This documentation site covers Koi’s protocol, contracts, and integrations. * Site: ### Senddy Senddy is our private payments product for USDC on Base. Same team, different chain and use case. Users can shield balances, send privately with ZK, and withdraw or spend when needed. Gasless UX and SDKs support consumers, institutions, and AI agents. * [Senddy](https://www.senddy.com) * [Senddy docs](https://www.senddy.com/docs) * [Senddy blog](https://www.senddy.com/blog) ### Who Founded Koi and Senddy? Koi was founded by Matt Tawil, who served as CTO focused on smart contract design, onchain UX, and security. More at [matt100x.dev](https://www.matt100x.dev). # Overview
## About Koi is a DeFi platform, serving as a liquidity hub for all projects on [zkSync](https://zksync.io). Koi's dynamic dApp features both a concentrated and standard pool AMM DEX, complete with limit orders, a farming platform, and a bond platform. Experience the evolution of DeFi 2.0 with low fees and gas-less swaps. ## The Team The team behind Koi has a deep history with Zero-Knowledge protocols in crypto. Before Koi, the team created the first Zero-Knowledge Atomic Swap protocol between BTC and UTXO based chains, along with innovative work on Zerocoin and Sigma addressing schemes and transactions. Now, they bring that expertise to Koi and their new initiative: the Koi DAO. With a team that has a proven track record of innovation and expertise, Koi is ready to become a leading player in the zkDeFi space by building on zkSync and driving long-term value to its community. ## Resources [Twitter](https://twitter.com/koi_finance)\ [Discord
](https://discord.koi.finance)[Telegram](https://t.me/mute_io) # Introduction Koi is one of the largest zkRollup DeFi Platforms built on [zkSync](https://zksync.io) Era. Invest & trade, earn yields, and participate in Bonds all on one decentralized, community driven platform. Leverage the security of Ethereum without high gas fees.
Features include: * AMM based DEX w/ Limit orders * Stable and Normal AMM curve pools * Variable LP fees: Stable (0.01%-2%), Normal (0.01%-10%) * Fixed and Dynamic Protocol fees * 0% LP minting fee * 1-3s settlements * 95%+ gas cost savings compared to L1 ETH * [Yield Generation Platform ](/mute-switch/amplifier) * [Bond Offerings](/mute-switch/bonds) * [DAO](broken://pages/-MUByzMMEZcgPHIh9jWS)
# Liquidity Pools Pool Design Koi is designed to have a dynamic setup for Liquidity Pools so that both ***Stable*** and ***Normal*** AMM curves can be utilized. Additional to these pools, Koi Finance also has Concentrated Liquidity pools as well.\ \ Stable Pool - Assets that trade within a close price range (e.g USDC/DAI) Normal Pool - Assets that trade with no correlation (eg. ETH / WBTC) Concentrated Pool - Custom price range based on user input There can be a Normal, Stable, and Concentrated pool for the same assets. Koi will find the best priced trade regardless of pool type. \ Fees for each pool are independent of other pools. Each type of pool has a min-max fee that can be set by LPs:\ \ \- Stable: 0.01%-2%\ \- Normal: 0.01%-10%\ \- Concentrated: 0.01%, 0.10%, 0.3%, 0.5%, 1% ## LP Fees Notice for v2 pools {% hint style="info" %} If you are building external contracts to hold LP tokens, make sure they call the [claimFees() ](https://github.com/muteio/switch-core/blob/main/contracts/dynamic/MuteSwitchPairDynamic.sol#L490)function on the LP pair prior to moving or receiving tokens. LP fees accumulate on the account that holds them and are non transferrable directly. {% endhint %} ```solidity // example for a contract that holds LP tokens // before withdrawing LP from a contract, claim fees and distribute // fees will be lost forever if not claimed eventually IKoiSwitchPairDynamic pair = IKoiSwitchPairDynamic(lp); (uint claimed0, uint claimed1) = pair.claimFees(); IERC20(pair.token0()).safeTransfer(feeReceiver, claimed0); IERC20(pair.token1()).safeTransfer(feeReceiver, claimed1); IERC20(address(pair)).safeTransfer(feeReceiver, pair.balanceOf(address(this))); ``` ## Stable Pools Stable pools are designed for assets that should be traded within a tight price range. This allows high volume trades to have capital efficient swaps. Once pricing is set upon pool creation, the trade price maintains tight a spread - make sure to set the proper pricing for these pools. $$ (x^3 \* y) + (y^3 \* x) ≥ k $$ ## Normal Pools Normal pools are designed for non correlated and volatile priced assets. These pools use a generic AMM formula and are used for most trading pairs. $$ x \* y ≥ k $$ ## Dynamic Pools Koi allows for pools to be created with LP fees ranging from 0.01% all the way up to 10% for normal pools, and 2% for stable pools. Once set upon pair creation, these fees can only be changed with the [LP governance system](broken://pages/vrxkFLlf7sIxkIysc9UQ). An LP provider (or delegated provider) with 50%+ vote weight can always change this fee. To prevent from gaming the system, there is a 0.1% fee on total votes when changing the fee of pools. This prevents flash loans from changing fee structures without some sort of losses. \ \ The simplicity of the dynamic fee pool w/ governance allows for a powerful system and tool for many projects in DeFi & crypto. \ \ **Game Theory** \ By observing traditional CEX markets and even most NFT marketplaces, it has been normalized for fees of 1%+ to be in place via marketmakers (spread), and content creators & teams (nfts). This fee system should empower not only individual LP providers, but also projects that focus on Protocol Owned Liquidity (POL) to set their base fee for their pairs to be able to build up a larger revenue stream for the project, versus what they can find on most traditional AMM based DEXs. ## Governance Koi comes prefabbed with a built in LP governance & delegation system. This allows for complex protocols to be built on-top of the Koi protocol, but also allows for dynamic fees within any LP pool.\ \ Each LP pool has a LP fee set upon pair creation. These fees can range from 0.1%-10%, depending on what the LP provider wants to set as the creator of the pool. Only one fee can be set at a time, meaning all LPs will be participating within that fee range. \ \ The LP governance system allows for the fee of the pool to be changed based on an account that controls more than 50% of the pool votes. Votes are directly correlated to the LP token supply balances. However, a LP provider may choose to delegate their 'votes' to another provider, allowing parties to lobby for delegates, thus increasing their pool weight. \ \ Mute has opted for this design, instead of a multi fee pool type for numerous reasons; the major one being that the pool with the deepest liquidity will always be traded on in comparison to its counterparts (pools with lower fees & lower liquidity). Thus, it is better to concentrate liquidity within one pool, and allow a governance system that allows for dynamic fees. ## Protocol Fees The protocol has 2 type of fees: * Dynamic (% of the LP pool fees) * Fixed (fixed % of the overall trade) If the protocol fixed fee is set and is larger than what the LP pool fees are, then LP providers earn no fees for trades. Protocol Fixed fees will only be used early upon launch until LP TVL grows to a sustainable amount.

# Concentrated Liquidity Pools (v3) ### Introduction[​](https://docs.uniswap.org/concepts/protocol/concentrated-liquidity#introduction) Based on Uniswap V3's implementation, Koi Finance's concentrated liquidity is liquidity that is allocated within a custom price range. In earlier versions, liquidity was distributed uniformly along the price curve between 0 and infinity. The previously uniform distribution allowed trading across the entire price interval (0, ∞) without any loss of liquidity. However, in many pools, the majority of the liquidity was never used. Consider stablecoin pairs, where the relative price of the two assets stays relatively constant. The liquidity outside the typical price range of a stablecoin pair is rarely touched. For example, the v2 DAI/USDC pair utilizes \~0.50% of the total available capital for trading between $0.99 and $1.01, the price range in which LPs would expect to see the most volume - and consequently earn the most fees. With Concentrated Liquidity, liquidity providers may concentrate their capital to smaller price intervals than (0, ∞). In a stablecoin/stablecoin pair, for example, an LP may choose to allocate capital solely to the 0.99 - 1.01 range. As a result, traders are offered deeper liquidity around the mid-price, and LPs earn more trading fees with their capital. We call liquidity concentrated to a finite interval a position. LPs may have many different positions per pool, creating individualized price curves that reflect the preferences of each LP. ### Active Liquidity[​](https://docs.uniswap.org/concepts/protocol/concentrated-liquidity#active-liquidity) As the price of an asset rises or falls, it may exit the price bounds that LPs have set in a position. When the price exits a position's interval, the position's liquidity is no longer active and no longer earns fees. As price moves in one direction, LPs gain more of the one asset as swappers demand the other, until their entire liquidity consists of only one asset. (In v2, we don't typically see this behavior because LPs rarely reach the upper or lower bound of the price of two assets, i.e., 0 and ∞). If the price ever reenters the interval, the liquidity becomes active again, and in-range LPs begin earning fees once more. Importantly, LPs are free to create as many positions as they see fit, each with its own price interval. Concentrated liquidity serves as a mechanism to let the market decide what a sensible distribution of liquidity is, as rational LPs are incentivize to concentrate their liquidity while ensuring that their liquidity remains active. ### Ticks[​](https://docs.uniswap.org/concepts/protocol/concentrated-liquidity#ticks) To achieve concentrated liquidity, the once continuous spectrum of price space has been partitioned with ticks. Ticks are the boundaries between discrete areas in price space. Ticks are spaced such that an increase or decrease of 1 tick represents a 0.01% increase or decrease in price at any point in price space. Ticks function as boundaries for liquidity positions. When a position is created, the provider must choose the lower and upper tick that will represent their position's borders. As the spot price changes during swapping, the pool contract will continuously exchange the outbound asset for the inbound, progressively using all the liquidity available within the current tick interval[1](https://docs.uniswap.org/concepts/protocol/concentrated-liquidity#fn-1) until the next tick is reached. At this point, the contract switches to a new tick and activates any dormant liquidity within a position that has a boundary at the newly active tick. While each pool has the same number of underlying ticks, in practice only a portion of them are able to serve as active ticks. Due to the nature of the concentrated liquidity smart contracts, tick spacing is directly correlated to the swap fee. Lower fee tiers allow closer potentially active ticks, and higher fees allow a relatively wider spacing of potential active ticks. While inactive ticks have no impact on transaction cost during swaps, crossing an active tick does increase the cost of the transaction in which it is crossed, as the tick crossing will activate the liquidity within any new positions using the given tick as a border. In areas where capital efficiency is paramount, such as stable coin pairs, narrower tick spacing increases the granularity of liquidity provisioning and will likely lower price impact when swapping - the result being significantly improved prices for stable coin swaps. For more information on fee levels and their correlation to tick spacing, see the Uniswap v3 [whitepaper](https://uniswap.org/whitepaper-v3.pdf). # Koi Farming Pools Info & Project Registration Koi farming pools is a liquidity reward protocol that allows LPs to **gain additional revenue APY** & take part in the Koi ecosystem. Amplifier rewards are fueled by platform revenue and fees, which come directly from the buy back and make system the Koite DAO has in place. \ \ Do note, there are **not** amplifier pairs for every liquidity pair on the Switch. Rather, amplified pairs are decided up by the team and Koi DAO. There will be amplified pairs for important base liquidity pairs such as ETH/USDC, WBTC/USDC etc. These will be linked and updated on this page as those become available.
The Koi Farming pool protocol has introduced a novel system that sets it apart from traditional dynamic farming models by implementing a static APY model. This innovative approach enables the protocol, as well as its partners & users, to generate calculated revenue based on the rewards distributed to farmers.\ \ The base APY in an amplifier is static. Additionally, if the pool has an extra amplifier APY set, the max apy is determined by a ratio of the users Ve vote share value to the lp value being deposited. The Ve vote share $ value is 1:1 with the current koi price (i.e. 500 vote shares = 500 koi):
$$ f(APY\_{amp}) = APY\_{base} + (clamp(user\_{veshares}/user\_{lpvalue}, 1) \* (APY\_{max} - (APY\_{max})) ) $$ {% hint style="info" %} Remember, you can own Ve vote shares by either owning veKOI NFTs directly and having ownership over its delegation, or by having other veKOI owners delegate their vote share to you. The amplifier does not care whether you own veKOI or not, only if you own 'votes'. This allows for third party LP's to bribe veKOI owners for their votes. {% endhint %} ### Example > Providing $1k worth of LP on an ETH/USDC pair with an amplifier that has a **10% base APY** and up to **15% APY** if the user is fully amplified with veKOI**.** The user is delegated 500 Ve vote shares and the current koi price is $1 \ **Amplified APY** = 10% + ($500/$1000 \* 5%) = **12.5%** Rewards are allocated immediately upon deposit and disbursed gradually over the month based on user redemptions. If the user chooses to withdraw their funds prematurely, they forfeit the remaining unmatured rewards.\ \ To own the max Amplified APY, you must have a vote share value of equal or greater to the value of lp being deposited.\ \ Your veKOI votes/holdings **carry over to all amplifiers**. If you are providing your LP to two amplifiers, your veKOI vote share balance is not split among them. Taking the previous example, if you provided LP on two pairs using those same exact numbers as above, your APY on both would be 12.5%. This is to encourage participation in all pools. ## Apply for the Koi Farming Program[​](https://docs.sushi.com/docs/Products/Yield%20Farming/What%20Is%20The%20Onsen#apply-for-the-onsen-program) To apply for the Amplifier program, please submit your project info to this link:[ Koi Farming Pool Registration](https://docs.google.com/forms/d/e/1FAIpQLSc8wcI9-Qd2U8rHAeRahKluOQfu7-pFCoZMXGXeyex28hIozQ/viewform) # Koi Bonds Info Bonding is the process of trading KOI-ETH LP share to the Koi DAO for KOI. The protocol quotes an amount of KOI and a vesting period for the trade. It is important to know: **when you purchase a bond, you are selling your LP share/tokens.** The Koi DAO compensates you with more Koi than you’d get on the market, but your exposure becomes entirely to Koi and no longer to KOI-ETH LP. The purpose of Koi bonds is to increase the amount of Protocol Owned Liquidity via the Koi DAO which increases the revenue towards the treasury and long term liquidity for the protocol. The benefit to bonding allows a user to purchase Koi at a lower cost basis. \ \ **Bonds are sold at a first come first serve basis.** A bond ROI starts at 0% and increases slowly until it is purchased. Once purchased, the cycle is reset with a new bond and Koi is paid out over 7 days via a veKOI lock.\ \ Learn more about veKoi mechanics [here](broken://pages/-MUByzMMEZcgPHIh9jWS). ### Example > Exchanging **$15k worth of** KOI**/ETH LP** with a bond that currently has a **15% ROI.** Bonding would sell the $15k KOI/ETH LP tokens to the Koi DAO and in exchange receive Koi tokens with an underlying Koi value of $15k \* 1.15 = $17.25k worth **at the time the bond was purchased**. The Koi is locked for 7 days. # Limit Orders Limit orders on the Switch utilize the native AMM as a liquidity and inventory provider. Due to this, limit orders can cause substantial or minimal slippage on limit orders based on the volume of the order and depth of the liquidity on the pair being traded. \ \ Regardless if a limit order causes a 10% slippage on the AMM pair being traded, the limit order owner **still receives the amount the order was placed for**. \ \ For limit orders to work, there is a free market of **market making bot(s)** that scan and execute trades based on their strategy and fees. \ \ A visualization: \ \ A limit order is made to purchase **token X** with 1 **ETH**. That order is created and approved so that once the AMM can support that purchase with no loss to the market making bot(s), the order is filled. With the nature of smart contracts, there are no 'automatic' executions of manually placed events such as a limit order. So as such, a free market of bot(s) continually scan limit orders to see if there are any that can be filled with any additional fees the bots want to charge. This is a free market, so any completion to these trades will mean fees should be low. Bot fees **do not** affect what the limit order receives, only the price of which the trade is executed at on the AMM level. \ \ If your order cannot execute without creating a 10% slippage because liquidity on the native pair is low in comparison to the trade, the trade will be executed once **token X** is trading at a **minimum** of -10% of your purchase price. This is because the limit order being executed will increase the the AMM pair price by 10% and to be able to fill the limit order with the amounts being asked for, this is the minimum deviation that needs to occur for that order to fill successfully. Although the AMM pair is affected with slippage here, the limit order is filled at the price it requested.\ \ There is also the opportunity for **inventory based market making** without needing to use the Switch native AMM module as a liquidity provider. \ \ \ *Design specs, examples, and market making bot(s) coming soon.* # Swap Widget Integrate the Koi Swap Widget into any site ## Integration You can easily integrate the Koi Swap Widget into your web apps with the iframe. ```jsx