Pools for Large Swaps

How pools for large swaps could be implemented on Shell

There aren't any custom pools for large swaps on Shell yet. Want to build one? Check out the developers page.

Price Impact Minimization

If you're a user looking to execute a large trade with a token pair that doesn't offer extensive liquidity, or perhaps you're a whale aiming to make a very, very large trade in a pool that has reasonable but not limitless liquidity, your trade will probably incur a high degree of price impact. This is because a single large transaction can severely unbalance the pool. Subsequently, arbitrage bots are quick to capitalize on such trades, effectively making a profit from your loss using the imbalance you create.

Evolving Proteus offers a solution to this problem. It enables the creation of customized pools that gradually sell the tokens you wish to dispose of in exchange for those you want to acquire, spread over a period of time. For example, if you aim to sell 10 million USDC, Evolving Proteus could initiate a pool filled with your USDC, which would then slowly rebalance until it is entirely made up of the token you are looking to purchase. Once the rebalancing is complete, you can then exchange your liquidity provider (LP) tokens for the desired token.

The entire process could be designed to be seamless for a front-end user, mimicking a standard swap operation in appearance. It's important to note that there would be gas fees involved in setting up the pool. Therefore, this strategy would be most beneficial for trades above a certain size. Luckily, Shell works to greatly reduce gas fees, making this a potentially practical solution for managing larger trades.