Increment ($INCR) is an AMM liquidity protocol built on zkSync Era. It introduces a system design that uses pooled virtual assets backed by collateral for liquidity and leverages Curve V2's AMM (Automated Market Maker) for trade execution.
It features:
- Automatically concentrated liquidity
- Dynamic fees
- Parametrizable pools
Increment offers higher security, throughput, and lower transaction fees by settling trades on zkSync Era, an Ethereum Layer 2 (L2) zero knowledge computation solution. The system maintains its fully decentralized, non-custodial protocol framework, while delivering a seamless trading experience.
Increment utilizes pooled virtual or synthetic assets backed by collateral and Curve V2’s AMM as the trading engine to enable on-chain perpetual swaps, allowing traders to go long or short crypto markets with leverage. As the "virtual" part implies, there are only synthetic balances in the Curve V2 AMM pools. Liquidity providers deposit real funds as collateral and the system will mint the corresponding amount of virtual assets in the AMM for trading. Liquidity providers earn fees in exchange for taking the opposite aggregated direction of the market, ie. market price changes determined by traders will affect the liquidity provider's position, but the profit or loss of traders will not directly affect the liquidity provider's profit or loss.
Perpetuals pertain to a special type of futures contracts; unlike the traditional form of futures, the perpetual contract does not have an expiry date. As a result, holders of the perpetual contracts can hold the position for an infinite period of time. However, to ensure that the perpetual price and index price converge on a regular basis, periodic funding payments are made to or by traders who are long or short based on the difference between perpetual contract markets and spot prices. Perpetuals also allow traders to open positions larger than their account size, amplifying either the profit or loss made by the trader. Trading on margin opens up the opportunity for higher gains, but also increases the risk of greater losses. Important: Traders can easily find themselves losing more than they bargained for by overextending their account in margin trades. Only trade with what you can afford to lose.
We are building on zkSync Era to start but it is unlikely for Increment to solely exist on zkSync in the future. After we transition into a DAO governed protocol structure, token holders can propose and vote on a multi-chain deployment, whether it’s on other L2s or L1s, in conjunction with opinions from the core engineers of the protocol to ensure readiness.
Increment is a perpetual futures platform that is dependent on other core DeFi protocols like Chainlink and Curve, thus once they are available zkSync Era, Increment will be deployed soon after.
Users can interact with the protocol in 4 main ways:
1) Long or short crypto markets with leverage
2) Deposit funds to provide liquidity and earn fees
3) Run liquidator bots to liquidate underwater positions
4) Participate in governance and help decide the future of the protocol
