Boosted Pools

Concept

The Boosted Pools feature of Algebra Integral provides a convenience layer for the CLAMM Pools containing ERC-4626 yield-bearing tokens.

Such pools have an obvious benefit compared to the pools built over unwrapped ERC-20 tokens in terms of extra yield from ERC-2626 vaults (i.e. lending, liquidity staking, etc).

The drawback is that the ERC-4626 tokens are rarely involved in swaps and the fees generated by such pools will be lower compared to the pools with underlying ERC-20 tokens.

The Boosted Pools feature provides a set of capabilities that allow interacting with the pool by using both wrapped and underlying tokens.

For example, aUSDC-aWETH if we use AAVE protocol as a source of yield. This pool wraps 2 tokens but it could also be configured to wrap single token, like USDT - aWETH.

This pool accepts both wrapped and unwrapped tokens for swaps and liquidity provision and we perform the necessary wrapping on the fly to complete the request.

Essentially, such a pool can serve both wrapped and unwrapped tokens in all scenarios which opens the way to utilize existing wrapped tokens. This capability reduces the liquidity fragmentation associated with ownership of wrapped tokens.

For example, we can perform swaps like these:

• USDC <-> wETH

• aUSDC <-> wETH

• USDC <-> aWETH

• aUSDC <-> aWETH

The same is true for liquidity provisioning: we may accept both wrapped and unwrapped tokens to create a concentrated liquidity position.

The limitation of this approach is that the choice of yield protocol for each token in the pool is done at the pool creation time and this setting is final.

Implementation

The feature is built using an enhanced Router and Quoter contracts (link to OmegaRouter doc). The frontend part is covered by the dedicated SDK.

Frontend SDK utilizes OmegaQuoter to build efficient routes across all the DEX pools including Boosted Pools. Then OmegaRouter is used to execute multihop routes that involve wrapping and unwrapping of ERC-4626 tokens as a part of the route.