1. Background
This proposal aims to declare key operational parameters for Minitswap, a swapping mechanism designed to enable safe, efficient, and near-instant transfers of OP-bridged assets between the Initia Layer 1 and its rollups. Minitswap addresses the inherent delays of traditional optimistic bridges, which typically require a 7-day challenge period for finality during asset withdrawals. By leveraging a virtual liquidity pool, Minitswap allows users to swap bridged assets with low slippage and minimal latency while preserving security and minimizing systemic arbitrage risks.
2. Parameter Changes
| Parameter | Value | Description |
|---|---|---|
| max_change_rate | 0.1 | Maximum change rate of virtual pool’s size. |
| stableswap_ann | 20000 | Amplification factor used in Minitswap to flatten the bonding curve and reduce slippage. Calculated as An^n100 where n is the number of tokens (typically 2). |
| stableswap_swap_fee_rate | 0.03% | Stableswap fee rate |
| swap_fee_rate | 0.03% | Swap fee rate for the virtual pool’s swap. |
| arb_fee_rate | 5% | Fee rate to charge arbitrage swaps. (If return amount > offer amount, arbitrage fee amount = return_amount - offer_amount) * arb_fee_rate) |
| trigger_fee | 500000 | Fee provided to the user who finalizes the in-house arbitrage transaction. |
| min_arb_profit | 10000000 | Minimum profit amount for the peg keeper to start the in-house arbitrage process. |
| ibc_timeout | 600s | IBC timeout used by the peg keeper when starting the in-house arbitrage. |
| max_arb_batch | 10 | The maximum number of in-house arbitrage processes that can exist simultaneously per virtual pool. |
| min_arb_interval | 86400s | The minimum interval between in-house arbitrage processes for each virtual pool. |
| unbond_period | 7 days | The duration of time applied to withdrawing liquidity from the Minitswap pool. |
3. Rationale
- Minitswap is essential to the Initia user experience, enabling fast and secure asset transfers across layers while avoiding the delays of optimistic bridge withdrawals.