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Automated Liquidity Provision

Automated Liquidity Provision emphasizes the importance of allocating the entire loan amount to a user's preferred liquidity pool and simplify record-keeping.
  • Here, the protocol divides and allocates a loan amount to a user's preferred liquidity pool.
  • Ideally, there should be nothing left from the loan amount because it makes record-keeping complicated.
  • For example, if someone takes a $1000 loan and chooses the USDT/ ETH pool, the entire $1000 must be added as liquidity to this pool.
  • With this problem statement, we concluded that the following should provide us with what we seek: get_amount_out(x) = quote(1000 - x) [JediSwap functions]
  • Readjusting the equation to the standard form would give:
(997∗x)/((reserveIn∗1000)+(997∗x))+x=(1000−x)/reserveIn (997*x) / ((reserveIn * 1000) + (997 * x)) + x = (1000-x)/reserveIn
  • Read this article to understand how we came to this equation.