Liquidity Provisioning
Boost Overview

Boost Overview

A major pain-point for users (swappers and LPs) is how slow deposits can be, particularly for slow chains such as Bitcoin where the deposits can take 30+ minutes. The majority of this deposit time comes from the fact that we need to protect our liquidity from re-orgs. If we process a deposits that after a re-org disappears from the canonical chain, the protocol can end up in a deficit.

Boost aims to improve the user experience by speeding up deposit times without increasing the risk to the protocol. This helps LP users re-balance their positions by speeding up deposits into their accounts. For swappers, on the other hand, faster deposit times means they can execute their trading strategy more effectively by reacting to global price movements quicker.

The basic idea is to let LPs put collateral in shared Boost pools of varying fee levels to be used as collateral for incoming deposits. When a “boost enabled” deposit is pre-witnessed (i.e. recognized by a majority of validators as having been included in a block on the source chain), the protocol will see if there is enough collateral in the pools up to the fee limit specified by the user. If there is, boost collateral will be used in place of the deposit (minus a boost fee), allowing the deposit channel's action (initiating swap or LP provisioning) to be executed early.

The boost pools take the risk on that deposit being confirmed at a later point once the safety margin has been reached. If it goes through, the boost pool will then be credited with the deposit, and the funds (which will have accrued a boost fee) be available for use again. If the deposit is never finalised due to a re-org which drops the deposit transaction altogether, the losses associated will be socialised amongst the boost contributors.