A composable DEX with HFT-grade liquidity for RWA.
Capricorn is a composable DEX with HFT-grade liquidity, built by ex-Robinhood and dYdX PM and engineers.
Capricorn's Proactive AMM aims to improve onchain execution while being fully composable. The PAMM pool improves onchain execution by anchoring pricing to an oracle price feed and dynamically create a spread around it. The design is uniquely positioned for stock tokens, FX and major pairs on the Robinhood Chain, for onchain liquidity to compete with tradfi.
Problem
The first generation of AMMs solved a real market-structure problem. They made liquidity permissionless. Anyone could deposit assets, anyone could trade against the pool, and anyone could build on top of that liquidity with a simple pricing formula like x × y = k.
This is great for long-tail assets, but for major pairs, execution becomes more of a challenge:
Adverse Selection: Price discovery emerges from arbitrage, causing LPs to systematically lose value by trading at stale prices (LVR), while also bearing inventory risk (IL).
Inefficient Liquidity Allocation (CPMM): Liquidity is not fully utilized leading to idle capital and lower capital efficiency.
Require Active Management (CLMM): Providing liquidity in CLMMs requires continuous monitoring, rebalancing, and strategy optimization, turning LPing into an active trading problem.
As a result, both end users swapping and LPs lose value from less capital efficient liquidity.
Solution
A Proactive AMM with oracle-based, proactively managed liquidity.
Two-part system:
1/ Pricing engine: continuously estimating fair value based on market price being pushed onchain.
2/ Onchain execution logic: turns that market view in to executable liquidity.
The PAMM expresses its quotes through a pricing curve, which can be updated through a few parameter adjustments, making it far more computationally efficient than managing individual order book quotes. By concentrating liquidity tightly around the latest oracle price, the AMM achieves extremely high capital efficiency and effectively embedding the pricing strategy directly into the blockchain inside the exchange's execution environment itself.
The impact of this design is a DEX that is
Fully composable: Composable across DEX aggregators and other defi protocols, through a familiar AMM interface.
Capital efficient: Pricing curve with configure parameters for liquidity concentration, spreads, rebalancing quotes.
Generates impermanent gains: Internalizes arbitrage and shields LP from loss-versus-rebalancing via spread, capturing additional value for LPs.
ABI's to integrate with PAMM Pools: https://github.com/capricorn-protocol/pamm-integration
During this hackathon, we refined our product direction and GTM strategies with the help of the canvas workshop and mentorship sessions. These are just a couple of the few actionable nuggets from the sessions that will help us with our progress moving forward; Got a clear warm intro path layed out to key partnerships: Arbitrum → Rialto → 0x → Robinhood - [Product] DeFi/Institutional/Intros w/ Andy & Uttam “ask - whether or not integrating on Robinhood Chain is a priority (given we have existing integrations already), if not we’ll prioritize our time with other integrations” as a way to frame the ask to get a clear response - [GTM] Integrations/Ecosystem w/ coinflipcanada & Kensie “focus on the core business, a front end might not be needed for the proactive amm. leverage 2nd mover advantage, generate revenue for pairs with the hight returns to grow revenue and create a flywheel for bootstraping more liquidity” - Wedge/Product direction w/ Lumi (Offchain) & Jess (Arbitrum)
No funds raised.
