First Impression
Lifinity launched in 2022 on Solana with the goal of reducing impermanent loss and improving capital efficiency using a proactive automated market making system. It stands out from typical AMMs by relying on oracle pricing and constant rebalancing. As of mid 2025, it holds about $24 million TVL and handles around $52,000 daily DEX volume.
How It Works
Lifinity organizes liquidity into concentrated pools and uses Solana’s Pyth oracle to set token prices proactively. Trades that rebalance the pool closer to its target composition are favored. This allows the protocol to rebalance without relying solely on arbitrageurs, helping limit impermanent loss.
Liquidity providers who lock LFNTY receive veLFNTY, which gives voting power and a share of revenue. Protocol owned liquidity is built through veIDOs and NFT based capital raises, while fees and buybacks reinforce the token model.
Asset Coverage and Volume
Lifinity supports around 19 pools, including SOL/USDC, BTC/USDC, ETH/USDC, SRM/USDC, and LFNTY/USDC. Fee income is modest, around $2,800 daily or about $153,000 monthly. Lifetime trading volume is estimated at $2.4 billion, though daily swaps remain low at roughly $50,000.
Incident Note
In December 2023, the LFNTY–USDC pool lost nearly $700,000 due to a bug triggered by an arbitrage bot using an immediate-or-cancel order vulnerability. The exploit processed a zero-amount output as a valid trade, collapsing the pool’s pricing. Developers have since patched the logic to block such trades.
Strengths
- Proactive market making reduces reliance on arbitrage and improves efficiency
- Concentrated liquidity minimizes slippage and capital requirements
- veLFNTY model enables revenue sharing, governance, and liquidity growth
- Protocol owned pools add long term stability
Trade-offs
- Low daily trading volume limits real market activity
- Anonymous team raises governance concerns; no public audit confirmed
- The past exploit shows the risks of complex smart contracts
- Tokenomics can be complex for newcomers to understand
Who It May Suit
Lifinity is aimed at experienced DeFi users and liquidity providers who want yield with lower impermanent loss. It appeals to those interested in ve token models and Solana based innovation. It is not designed for high volume traders or users who need simple order books and wide token support.
Conclusion
Lifinity offers a new approach to AMMs on Solana, combining proactive pricing, concentrated liquidity, and ve token governance. TVL and revenue are growing, but trading activity is still small and risks remain. It fits early Solana adopters and LPs comfortable with complexity, but less so mainstream traders who expect depth and ease of use.