🌊Liquidity Pools

The core functionality of Sterling is to allow users to trade digital assets in a secure way, with very low fees and low slippage.

Slippage is the difference between the current market price of an asset and the price at which the actual trade/transaction is executed. This difference could result in a smaller amount (higher price paid) or a higher amount (smaller price paid) of desired tokens returned from a trade.

To provide access to the best rates on the market, we identified two types of assets:

• correlated - for example stable coins ($USDC, $DAI, etc.)

• uncorrelated - for example $STR and $ETH

Sterling offers two different liquidity pool types based on token pair needs, Stable Pools and Volatile Pools.

The protocol router evaluates both pool types to determine the most efficient price quotation and trade execution route available. To protect against flashloan attacks, the router will use 30-minute TWAPs (time-weighted average prices). The router doesn't require upkeep (external maintenance).

The deeper the liquidity of a given pool (higher value locked), the smaller the slippage it will offer.