Since its first announcement on July 20, 2021, Trident seems to be the next evolution of the decentralized finance (DeFi) world. The goal of this new protocol is to create a set of software components facilitating the implementation of liquidity pools with various features. Let’s take a closer look at what’s behind this technology.
Trident, a new start for Sushi?
While it has been delayed throughout 2021, due to internal concerns, Trident is finally available on the Polygon sidechain (MATIC). This protocol has been created by some members who compose the Sushi team. Remember that Sushi is the 4th largest decentralized exchange with $3.63 billion in total value locked on over 16 blockchains.
So, for reasons of gas savings and to have a consistent population that will use this new feature, the organization decided to deploy the first version on the Polygon blockchain.
This first test of Trident is just the beginning. Indeed, the protocol in its current state is no different from the simple token swap you can already find on the DEX with the sweet name of the traditional Japanese dish.
As the audits come in, for each of Trident’s features, it will evolve. The team wants to preserve the security of users at the expense of a sloppy work that could lead to the loss of funds.
But what is Trident?
Trident can be considered as a new stage of decentralized finance (DeFi). It is to automated market maker 2.0 what Olympus Dao or Tokemak are to DeFi 2.0, i.e. a pioneer. It is through a framework named IPool that the Sushi team has developed a smart contract that aims to bring together several features.
Before going into detail, it is important to understand that a liquidity pool is a smart contract that cannot be modified once it is set up. For example, it is not possible for Uniswap to modify a smart contract on a pool already launched. Thanks to IPool, it will be possible to modify it. This will have the effect of unlocking or not specificities.
We know that 3 types of pools exist at the moment. The first one is the one used by Uniswap v3.0 and allows users to concentrate their liquidity on a certain range or not. The second type is specific to a single protocol, Balancer.
The purpose of the latter is to have access to so-called weighted pools. The creator of the pool is free to define the assets (up to 8 for non-stable tokens, otherwise 5) with percentages that can vary from 1 to 99%. Finally, the last one groups the pools of stablecoins or crypto-assets with the same value. This corresponds to what the Curve protocol offers.
The power of IPool lies in its ability to bring together these 3 types of pools through a smart contract, while being able to modify only the latter. Trident is the name behind the first exploitation of this framework.
Indeed, while it’s been months since scandals have surrounded the SushiSwap protocol, the delivery of this first product seems to reassure. That said, nothing is won yet and we will have to be patient and be sure that Triden is functional before claiming victory for the team. This new version leads to a reduction of costs thanks to the optimization of the code and the use of BentoNox (the toolbox of the protocol).
At the same time, Sushi is actively working on optimizing transaction routes as DEX aggregators 1Inch andParaSwap already do. Note that a portion of the transaction fees (performed on any blockchain) will be allocated to holders of xSUSHI tokens, the SUSHI staking token.