Capital Efficiency
Capital efficiency describes the trading capacity a pool provides for the capital committed to it. Multiswap increases the reach of each reserve by using it across every trading pair containing that asset.
One reserve, many markets
Consider a pool containing USDC and nine tokenized stocks. Its USDC reserve serves all nine stock/USDC markets. Each stock reserve serves its USDC market and its markets against the other eight stocks.
A trade updates the participating reserves and their accounting scales. Subsequent trades use that updated state. The capital remains available to the pool’s connected markets as balances and prices evolve.
The advantage grows with the asset universe
With n registered Reserve Assets, the pool supports n * (n - 1) / 2 distinct pairs. Each asset participates in n - 1 pairs. Adding one asset creates n new pairs with the existing assets.
| Reserve Assets | Trading pairs | Markets served by each reserve |
|---|---|---|
| 2 | 1 | 1 |
| 5 | 10 | 4 |
| 10 | 45 | 9 |
| 20 | 190 | 19 |
This expanding reuse is the source of the pool-size advantage. The table counts supported markets. Executable depth in each market comes from its reserve state and pricing parameters.
Here, pool size means the number of assets sharing liquidity. Increasing token balances within an existing asset universe also increases the trade sizes those reserves can accommodate at a given relative reserve movement.
Capital efficiency and price response
Shared reserves determine how capital serves the market network. Scale elasticity determines how prices respond when that capital is traded.
For a given relative reserve change, a scale elasticity closer to one produces a smaller local price response within the supported range. The receive-side reserve state, fees, and available Surplus also contribute to the final user quote.
These properties work together: the pool shares capital across markets and applies its execution model to each trade. Elasticity and Dynamic Weights describes that price response.
Assess the market you will use
Compare net receive amounts at the intended trade sizes. Include fees, transaction costs, current balances, and the selected pool’s parameters. Use quotes from a consistent state snapshot when evaluating several markets.
For a liquidity provider, consider the set of markets served by the deposit alongside portfolio exposure and concentration. A broader asset universe expands capital reuse while introducing the characteristics of each additional asset.
Trading income from shared capital
The markets served by a reserve are also places where trading activity can generate fees. An LP position combines the underlying asset exposure with the income allocated under the pool’s reward policy. The asset universe determines the reach of the capital; actual activity and fee rates determine the income it generates.
Trades pay the pool the full value of the assets they receive, valued at post-trade prices. Trading fees generate income on top. Portfolio Exposure and Trading Income brings that execution property together with the LP economics.
Stocks and real-world assets
An equity pool can share its stablecoin reserve across many stock markets, while each stock reserve participates throughout the same universe. An LP Token then represents a position in that trading portfolio.
Tokenized Stocks and RWAs develops the application. USD.cav provides the current stablecoin testnet entry point.