On Solana, there are two types of concentrated liquidity algorithms for DEXs: the tick calculation mechanism forked from Uniswap and the bin calculation mechanism inspired by Trader Joe's approach. The reason for using ticks is simple—Uniswap has a complete and backward-compatible architecture, so following Uniswap minimizes errors. The bin mechanism, on the other hand, requires exploration for future scalability. However, the advantage of bins lies in reducing computational and storage overhead, especially computation, which is reduced exponentially. This is particularly important for high-performance chains with sub-second speeds. Why do Solana transactions often fail? Because if the result cannot be computed within 0.4 seconds, it times out. Using the bin mechanism can significantly reduce the failure rate. Bins are also more suitable for high-frequency trading and market makers. As on-chain quantification becomes more prevalent, the advantages of the bin algorithm may gradually become more apparent.
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