16May 2023

Maverick Protocol

by Matthew Harcourt

Maverick Protocol is a portfolio project of Apollo Crypto that has recently launched on Ethereum Mainnet and zkSync Era with very promising early success. Maverick Protocol is a decentralised exchange that is pioneering a brand new Automated Market Maker (AMM) design. 

When it comes to clear breakthroughs in the development and adoption of the AMM within decentralised finance, there are thee key innovations that come to mind for crypto investors.

1: Uniswap V1

In November 2018 Uniswap V1 pioneered the x*y=k Constant Product Market Maker, making it easy for any user to provide liquidity and earn yield on their crypto assets as well as trade fully on-chain. This proliferation of V1 and eventually V2 (launched in August 2020) catalysed the first significant increase in the adoption of decentralised finance in June, July and August 2020, this period is known as ‘DeFi Summer’. 

2: Curve Finance’s StableSwap Exchange 

Launched in January 2020, Curve Finance’s new AMM formula provides superior pricing between assets of an equivalent value, such as stablecoin to stablecoin or ETH to ETH derivative (sETH, stETH etc). Curve became the premier destination for these types of on-chain trades, beating Uniswap.  

3: Uniswap V3’s ‘concentrated liquidity’ 

Launched in May 2021, Uniswap V3 enables liquidity providers to provide liquidity to specific price ranges, resulting in higher capital efficiency when compared to V2’s design. Providing liquidity to V3 is significantly harder than V2, resulting in V2 remaining relevant to this day. 

Since Uniswap V3’s launch, it is very hard to point to a more recently released product or protocol that is recognised as a definitive breakthrough in AMM design. 


Maverick Protocol and the Dynamic Distribution AMM

Maverick Protocol maximises capital efficiency by automating the concentration of liquidity as prices fluctuate, meaning liquidity providers can add price directionality into their liquidity position. In essence, this results in: 

  • More control for liquidity providers over their strategy;
  • Reduced sophistication required from liquidity providers; and
  • Better prices for traders. 

Since launching in March 2023, Maverick Protocol has seen clear traction in stable asset swaps, competing directly with Curve Finance and Uniswap V3. Despite only having US$19 million Total Value Locked (TVL) Maverick has a total volume of US$1.3 billion as of 16 May. It is important to note that this volume is driven by order flow from 1inch, a decentralised exchange aggregator, meaning Maverick is gaining volume by simply being the best price available to the market.   


Liquidity Provider Options

Mode Right – This strategy follows the price of the base asset when it appreciates against the quote asset.

Mode Left –  This strategy follows the price of the quote asset when it appreciates against the base asset.

Mode Both – This strategy follows the pool price up and down, automatically concentrating liquidity as prices fluctuate.

Mode Static – This strategy allows you to add liquidity without engaging Maverick AMM’s liquidity shifting mechanisms, similar to Uniswap V3.

These liquidity options culminate in a breakthrough of innovation within the decentralised exchange sector due to the significant increase in capital efficiency Maverick is able to achieve. Since launching, the ‘Mode Both’ liquidity provision option has consistently captured higher fee APY than Curve Finance for stable assets.

Learn more about the technical detail driving Maverick Protocol through their documentation and keep up to date with future Maverick developments through twitter.

Matthew Harcourt

Matthew has been actively investing in the crypto markets for 7 years and holds a Bachelor of Business from Monash University, majoring in Accounting. Matthew focuses on portfolio construction through thorough research and analysis of crypto protocols as well as execution of investments and strategies. Matthew’s passion lies in supporting portfolio companies through advisory on tokenomics and strategy, adding significant value to Apollo’s early-stage investments.