Maverick Takes Aim at the DEX Landscape

Introduction

There’s a brand new DEX in town, and it’s quietly sitting among Ethereum’s top 5 DEXs by volume. Maverick Protocol has been off to a great start since its recent launch on Ethereum and zkSync.

Maverick offers directional liquidity provision, extreme capital efficiency, little to no slippage trades, and several QOL improvements for LPs. Let’s explore why Maverick isn’t just another DEX; it might be the most serious challenger to Uniswap’s dominance since the launch of v3.

Maverick AMM Design

Maverick differs from most other AMMs with its use of liquidity bins. Liquidity bins are discrete price ranges similar to Uniswap v3’s ticks.

Price discovery within a bin uses a constant-sum formula, allowing for zero-slippage trades. Slippage only occurs when all of a bin’s liquidity is consumed, causing the active bin to shift up or down. Even though Uniswap is extremely capital efficient, there is still a small amount of slippage within ticks due to the constant-product formula.

The standardized nature of bins compared to ticks carries the benefit of fungible LP positions. This allows Maverick to support a liquidity mining apparatus where projects can permissionlessly incentivize liquidity via “boosted pools.”

Much of the Maverick’s liquidity bin architecture is shared by Trader Joe. For a deep dive into the nuance of bin architecture, check out Trader Joe’s Novel Take on Concentrated Liquidity.

Maverick’s key features are its incentivized pools, custom liquidity shaping, custom fee tiers, and directional liquidity provision. Directional liquidity provision is achieved with Maverick’s Automated Liquidity Placement (ALP) mechanism.

Directional liquidity provision powered by ALP allows LPs to embrace the positive-delta nature of liquidity provision. Previously, LPs have been forced to assume the market risk of both assets while lacking the commensurate degree of upside. Maverick’s modes allow LPs to express an opinion on the trajectory of