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DAMM v1 stable pools are designed for token pairs that are expected to trade close to a known relationship. Common examples are stablecoin pairs such as USDC/USDT and permissioned SOL/LST pools that can account for a supported staking-token virtual price. Instead of spreading liquidity evenly across every possible price like a volatile constant-product pool, a stable pool concentrates more of its effective liquidity near the target relationship. The result is a smoother trading experience for assets that should not move far apart.

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What stable pools are best for

Use a DAMM v1 stable pool when the pair has a strong reason to trade close together:
  • Stablecoin pairs such as USDC/USDT or other dollar-denominated assets.
  • Closely correlated assets where traders expect a tight exchange rate.
  • Yield-bearing or receipt-style assets when the pool can account for their value relationship.
  • High-volume routing pairs where low slippage matters more than supporting a wide speculative price range.
A stable pool is not the right fit for a volatile token launch or a pair where the price can move freely. For those markets, a constant-product pool is usually more appropriate.

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How stable pools work

DAMM v1 stable pools use a StableSwap-style curve. Product-wise, the curve has two behaviors:
  • Near the expected relationship, it behaves like the pool has deeper liquidity, so trades can happen with lower slippage.
  • Far away from the expected relationship, it becomes more expensive to push the pool further out of balance.
This creates a natural incentive for the pool to support efficient swaps near the target while still protecting LPs when one side becomes scarce.

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Fees and limits

By default, stable-swap pools use a 0.01% trade fee with 0% protocol fee, so the full trade fee remains LP-relevant. Permissionless fee-tier creation also allows 0.04%, 0.10%, and 1.00% stable-pool trade fees. Stable pools support imbalanced deposits and single-sided withdrawals through stable-swap math. Constant-product pools do not support those curve operations.

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The role of amplification

The amplification factor, often called AMP, controls how concentrated the pool’s liquidity feels around the target relationship.
  • Higher AMP means tighter pricing and lower slippage near the target.
  • Lower AMP means the pool behaves more like a normal AMM and is more tolerant of imbalance.
DAMM v1 permissionless stable pools must use amp = 100, token multipliers derived from mint decimals, and no depeg mode. More specialized stable pools require permissioned setup.
Think of AMP as the pool’s confidence in the relationship between the two assets. If the assets are genuinely stable relative to each other, more amplification can improve the trading experience. If the relationship is uncertain, too much amplification can make the pool brittle when the pair moves away from the target.

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Why stable pools help LPs

Stable pools are built to make LP capital more productive around the prices where trades are expected to happen. For LPs, that can mean:
  • More efficient use of liquidity around the target relationship.
  • Better volume capture from routers and aggregators looking for low-slippage paths.
  • Less need for active position management compared with concentrated liquidity systems.
  • Additional potential yield when eligible assets are connected to Dynamic Vaults.
DAMM v1 stable pools are still passive LP positions. LPs deposit assets, receive LP tokens, and hold a share of the pool. They do not need to manually rebalance a custom price range.

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Dynamic Vault composition

Stable pools can compose with Dynamic Vaults when the assets are supported by the vault layer. That means some idle pool liquidity can be allocated into external lending strategies while the pool continues serving swaps and withdrawals. This matters because stable pairs can sometimes have lower trading fees than volatile pairs. Vault yield can help improve the LP return profile during quieter trading periods.
Dynamic Vault yield is an additional source of return, not a guarantee. Lending strategies introduce their own risks, and pool liquidity must still support withdrawals and swaps.

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Stable pools vs constant-product pools

Choose a stable pool when:
  • The assets should trade close to a target value.
  • Low slippage near the peg is the main goal.
  • LPs want passive liquidity without setting active ranges.
  • The market is more about efficient routing than price discovery.
Choose a constant-product pool when:
  • The assets can move significantly against each other.
  • The market needs full-range price discovery.
  • The pair includes a volatile token.
  • You do not want the pool optimized around a specific relationship.

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Example: Stablecoin Liquidity

Suppose a USDC/USDT pool has deep liquidity and both tokens are expected to trade close to $1. A stable pool can offer tight pricing for users swapping between the two assets. Traders get lower slippage, aggregators can route more volume through the pool, and LPs earn fees from that activity. If the pool’s assets are supported by Dynamic Vault strategies, idle liquidity may also earn additional yield, improving the pool’s appeal even when swap volume fluctuates.