The Katana V3 Upgrade is Coming Soon!
Customizable Fees, Less Slippage, Deeper Liquidity ⚔️
Key Points
The Katana V3 Upgrade is coming soon! If everything goes according to plan, Ronin’s decentralized exchange will start supporting concentrated liquidity pools at the end of November, pending a full audit report from Codearena. The upgrade will bring customizable fees, reduced slippage, and optimized tools for traders and liquidity providers.
New Features for Liquidity Providers: Concentrated liquidity and customizable fee tiers will empower LPs to set precise risk levels and profit margins, while supporting the Ronin Treasury.
More Efficiency, More Growth: This upgrade will boost capital efficiency and liquidity on Ronin’s DEX, reducing the need for high RON emissions in the Katana Liquidity Program. This will also lay the foundation for more token listings. More details below.
The Katana V3 Upgrade is coming soon! If everything goes according to plan, Ronin’s decentralized exchange will start supporting concentrated liquidity pools at the end of November, pending a full audit report from Code4rena. That means less slippage and more trading depth, which in turn improves traders’ and Liquidity Providers’ capital efficiency. Here’s what’s coming soon:
Introducing Concentrated Liquidity and Fee Tiers
On Katana V3, Liquidity Providers (LPs) will be able to create focused positions within custom price ranges on Katana. For example, LPs might deploy capital for an ETH/USDC pool within a price range of $2,500 to $3,500. As a result, they’ll earn a higher percentage of rewards on trades executed within that range. In turn, traders will enjoy lower slippage and greater depth at common price ranges. This type of pool should benefit pegged assets (e.g stablecoins pairs like USDC<>USDT) and assets that trade within more established ranges (e.g major assets like WBTC<>WETH).
New Fee Tiers will also allow LPs to set rates for individual trading pairs. Higher fees for less-correlated pairs like PIXEL/RON, lower fees for more stable pairs like RON/WRON. Here’s an example of how this can reduce traders’ swap fees:
Katana V2: PIXEL (x0.3%) → RON (x0.3%) → USDC
Katana V3: PIXEL (x0.3%) → RON (x0.01%) → USDC
Katana V3 fees will support the Ronin Treasury according to the structure below:
1% Fee = 0.85% LP +0.15% Ronin Treasury
0.3% Fee = 0.25% LP + 0.05% Ronin Treasury
0.01% Fee = 0.005% LP + 0.005% Ronin Treasury
Katana Liquidity Mining Program Update
The original purpose of the Katana DEX Liquidity Mining Program RON rewards was simple: to bootstrap liquidity of major tokens on Ronin. Katana’s V3 upgrade introduces more capital efficiency in liquidity provision and makes room for deeper liquidity on Ronin. As RON volume and liquidity continue to grow in parallel, the need for aggressive incentives diminishes.
As a result, Phase 2 of the reward adjustment will be implemented on 26th November 2024.
Phase 2 further halves emission rates, saving over 2.7M RON per quarter. This will also reduce RON inflation without significant impact to liquidity, which was the case during Phase 1 adjustments.
Refer to this announcement for insights into why we are adjusting RON emissions.
Final Thoughts
When the Katana DEX launched, only AXS, SLP, USDC, and WETH were available to trade. Today, anyone can swap RON, WBTC, PIXEL, and even PHPC on Katana. This is just the beginning, and more tokens are coming. Katana’s V3 upgrade will lay the foundation for yet another era of growth. Let’s keep pushing.
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