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Introduce dynamic EMA parameter that evolves with pool liquidity #1563

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@0xcacti 0xcacti commented Apr 23, 2025

Description

The EMA parameter (alpha) is more crucial when the pool has low liquidity. As the pool liquidity increases, the EMA parameter can be relaxed, until we reach a saturation point, where sufficient liquidity means we can eliminate the EMA altogether (i.e. alpha=1.0). We have a mathematical function that takes the pool liquidity scale as input, and provides the appropriate alpha value (described in detail in the corresponding documentation)

Related Issue(s)

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Type of Change

  • Bug fix (non-breaking change which fixes an issue)
  • New feature (non-breaking change which adds functionality)
  • Breaking change (fix or feature that would cause existing functionality to not work as expected)
  • Documentation update
  • Other (please describe):

Breaking Change

n/a

Checklist

  • I have performed a self-review of my own code
  • I have commented my code, particularly in hard-to-understand areas
  • I have run cargo fmt and cargo clippy to ensure my code is formatted and linted correctly
  • I have made corresponding changes to the documentation
  • My changes generate no new warnings
  • I have added tests that prove my fix is effective or that my feature works
  • New and existing unit tests pass locally with my changes
  • Any dependent changes have been merged and published in downstream modules

Screenshots (if applicable)

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Additional Notes

@gztensor gztensor added the skip-cargo-audit This PR fails cargo audit but needs to be merged anyway label Apr 24, 2025
@0xcacti 0xcacti force-pushed the feature/ema-scale-factor branch from 2024cd2 to 7b6ca8b Compare April 24, 2025 19:48
@0xcacti 0xcacti changed the base branch from main to devnet-ready April 24, 2025 19:49
@0xcacti 0xcacti force-pushed the feature/ema-scale-factor branch from f412ce8 to de2002b Compare May 27, 2025 01:16
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