Stableswap Logic

Definition ∞ Stableswap logic describes the algorithmic rules for exchanging stablecoins with minimal price deviation on decentralized exchanges. This specialized automated market maker (AMM) algorithm is optimized for trading between assets that are expected to hold a stable, close-to-equal value, such as different stablecoins. It significantly reduces slippage and impermanent loss compared to general-purpose AMMs for such pairs. The logic ensures efficient and low-cost exchanges.
Context ∞ Stableswap logic is a critical innovation in decentralized finance (DeFi), enabling highly efficient and capital-efficient trading of stable assets, often featured in market analysis news. Its adoption has significantly improved the user experience for stablecoin users and facilitated the growth of various DeFi protocols. Understanding this logic is key to comprehending the mechanics of stablecoin liquidity and the stability of the broader DeFi ecosystem.