[EPIC][CL]: Concentrated Liquidity

[p0mvn]

Background

This is an epic to track work on concentrated liquidity (CL). While a concrete direction might still be uncertain, this issue aims to document the latest discussions.

Suggested Design

Introduction

We will begin by implementing the Uniswap V3 paper for the MVP. Then, we will consider changes to the existing logic.

Concentrated Liquidity Tasks

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1. [Story][CL]: Liquidity Provision #3028
   4 of 4
   C:x/gamm F: concentrated-liquidity T:story +3
2. [Story][CL]: Swapping #3029
   8 of 8
   C:x/gamm F: concentrated-liquidity T:story +3
3. [Story][CL]: Fees #3074
   C:x/concentrated-liquidity F: concentrated-liquidity T:story +3
4. [Story][CL]: Incentives #3991
   F: concentrated-liquidity +1
   
5. [Story][CL]: Concentrated Liquidity Module #3041
   C:x/concentrated-liquidity F: concentrated-liquidity T:story +3
6. [Story][CL]: Pool Manager Module #3042
   C:x/swap-router F: concentrated-liquidity T:story +3
7. [CL][Story]: E2E Testing #3200
   F: concentrated-liquidity T:story T:tests T:tracking issue ⛰ +4
8. [Story][CL]: Simulator testing for concentrated liquidity #4027
   F: concentrated-liquidity T:story +2
   
9. [Tracking Issue][CL]: Misc Tasks #3030
   C:x/gamm F: concentrated-liquidity T:tracking issue ⛰ +3
10. refactor(CL Swaps): reduce complexity around swap logic #4424
    6 of 6
    F: concentrated-liquidity T:tracking issue ⛰ +2
    

Project View

For project view, all remaining issues and milestones, please see this board:
https://github.com/orgs/osmosis-labs/projects/1/views/69

For internal audit issues, please see this board:
https://github.com/orgs/osmosis-labs/projects/1/views/74

For OtterSec audit, use this:
https://github.com/orgs/osmosis-labs/projects/1/views/75

Scope of changes

Ordered by perceived risk:

• x/concentrated-liquidity
  • The module with the core CL logic
  • Completely unreleased, needs everything reviewed
• x/superfluid
  • Many changes related to introducing the new logic into the superfluid feature
  • Keep in mind slashing logic that happens in BeginBlock / EndBlock. Panicking here would cause chain halt.
• x/incentives and x/pool-incentives
  • Integrations of concentrated liquidity into the existing Osmosis incentives framework
  • Important content on how our CL incentives system differs from what is existing currently with balancer: [CL] Implement reward splitting and Balancer migration #4828
• x/gamm
  • This is the module containing the balancer and stableswap pool management
  • We added new migration management functionality here
• x/poolmanager
  • This is the module that manages pool creation, ID management and swap routing
  • It has been partially releases during the previous upgrade
  • A large portion of the changes is ported from pre-existing x/gamm module
  • Things to focus on (new logic):
    • SplitRouteExactAmountIn
    • SplitRouteExactAmountOut
    • CreatePool
• x/twap
  • Changes and integrations of CL into x/twap
• x/protorev
  • Module that does backrunning of swaps
  • Scope of changes: integrations into the CL module to grab highest liquidity CL pools for determining which pools to backrun
• x/lockup
  • Keep in mind BeginBlock / EndBlock lock maturity. Panicking here would cause a chain halt.
  • Module that manages locking of assets
  • Some changes stemming from superfluid integratino
• v16 upgrade handler logic
  • This logic runs during upgrade and creates a canonical pool from the pre-existing OSMO/DAI pool

Documentation

Up-to-date

• Latest public documentation: https://github.com/osmosis-labs/osmosis/tree/main/x/concentrated-liquidity

Diagrams

• Scope of superfluid changes

• https://lucid.app/lucidchart/c3edc266-177d-4d8d-9259-9340c1222839/edit?invitationId=inv_ccb8b41d-e744-40ef-a98c-d40d469f4397&page=0_0#

• Component Diagram & PoolManager + Gamm Refactor: https://lucid.app/lucidchart/6f0903fe-b5e9-43bc-949f-3ca3616d6e27/edit?page=0_0#

Useful resources

• Accumulator package

  • https://uploads-ssl.webflow.com/5ad71ffeb79acc67c8bcdaba/5ad8d1193a40977462982470_scalable-reward-distribution-paper.pdf
  • https://drops.dagstuhl.de/opus/volltexte/2020/11974/pdf/OASIcs-Tokenomics-2019-10.pdf

• Common SDK and state-compatibility gotchas

Might be outdated

• Incentives: https://hackmd.io/yXK0RaJ7S2uh1m2W-OSdTw
• Trade-off space for incentives: https://hackmd.io/kJrhhh8AT2mXtCzDppkYWg
• Final Uptime Freeze Incentive Design Spec: https://hackmd.io/slJ7R-fMRjCWI1vioLcNAA
• V3 Incentive Call 14JAN23: https://hackmd.io/CHy5KkdaQFWykA7fqKaxMw
• Incentives design whiteboarding: https://hackmd.io/cJDKjFgdQu28Mdiu-bI4pw
• Geometric Tick Spacing with Additive Ranges ADR: https://hackmd.io/lUQRiQTgTkmYjDQSCV0FTg
• Accumulator API: https://hackmd.io/EUFXVr9_Roykx3jE9NNRzw
• Breaking changes for frontend: https://hackmd.io/tMVTxXWWQju0Xis0QS5gDg
• Fee discussion: https://hackmd.io/UmXlBD9pSTav4fVi2SVnnA

GitHub Issue Labels

• "F: concentrated-liquidity"

  • Everything associated with the CL feature

• "cl-internal-review"

  • Issues created during our internal review

• "cl-ottersec-review"

  • Issues created during OtterSec internal review

• "cl-informal-audit"

  • Issues created during Informal internal review

Acceptance Criteria

• concentrated liquidity MVP works

[czarcas7ic]

I am going to close this since we are now using the sprint board to track. Please feel free to re-open if you feel this provides some kind of clarity that the sprint board does not

[p0mvn]

I'm going to reopen this to keep the list of resources here for the auditors