ThalaSwap: The Liquidity Hub of Aptos

Thala Labs
6 min readJan 21, 2023

ThalaSwap is Thala’s in-house, rebalancer automated market maker (AMM). Our AMM takes inspiration and iterates on the Balancer and Curve models. While similar in pool and gauge architectures, ThalaSwap differs from these two aforementioned protocols through its synergy with our core product offering: Move Dollar. ThalaSwap not only aims to become the core liquidity hub of Aptos, but to also bolster $MOD’s use-case and yield opportunities.

ThalaSwap aims to become the core liquidity layer for Aptos while ensuring $MOD has deep liquidity across its DeFi ecosystem. The AMM will support three different types of pools: weighted pools, stable pools, and liquidity bootstrapping pools (LBPs). Pool creation on ThalaSwap will be permissionless, allowing any user to create a multi-asset pool of their liking. Swap fees, while fixed, will be a changeable parameter via governance in the near future. At launch, all $MOD liquidity and its corresponding pairs will be live on ThalaSwap.

Pool Offerings

As a brief primer, weighted pools are liquidity pools that enable greater flexibility around pool weightings and number of pool tokens compared to the two-token, 50:50 limitations of the traditional Constant Function Market Maker (CFMM) model. By allowing for the creation of pools with up to 4 assets, ThalaSwap pools provide more direct token pairs, increasing swap availability and fees that are collected and distributed to liquidity providers. Additionally, a popular use case of the weighted pool design are 80:20 weights for vetokenomics which will be supported with ThalaSwap.

Stable pools enable more capital-efficient swaps of tightly correlated pairs. This may include stablecoins, wrapped assets, and staked derivatives against the base token (i.e. staked Aptos and Aptos). The amplification coefficient, or A-Factor, is a fully tunable parameter that can adjust the price curve for more optimal swaps by minimizing slippage.

Lastly, liquidity bootstrapping pools (LBPs) are specialized weighted pools that enable effective token distribution. As a modified dutch auction, LBPs promote equitable price discovery and distribution for communities while reducing the amount of capital needed with other token distribution mechanisms. Like Fjord Foundry, which leverages on Balancer’s LBPs, Thala is building a similar product and will conduct its token offering as a LBP. We’ll explain LBPs further in the near future in our blog post.

ThalaSwap and MOD

As a pillar of our DeFi stack, we anticipate the AMM to have direct integrations and extra benefits with $MOD, one of our other key products. Given enough liquidity, key liquidity pool tokens (LPTs) such as $MOD-$USDC, can be used as a collateral type in the CDP if approved through governance, opening up strategies that allow users to leverage their position and earn higher yield. If recursive borrowing through ThalaSwap and the CDP isn’t attractive, certain LPTs can be staked directly on the AMM to boost rewards. Three core liquidity pools — $APT-$MOD, $MOD-$USDC, and $THL-$MOD — will be available for staking with more being added in the future through governance.

Stay tuned as we release more information over the coming days on our launch plan, $THL tokenomics, roadmap, and more!

Thala Labs is an organization focused on deploying innovative DeFi products on Aptos. We at Thala Labs are a group of passionate builders, researchers, and engineers with diverse experiences and expertise. Our founding contributors and advisors have both crypto-native and traditional tech backgrounds, including MakerDAO, ParaFi Capital, NEAR, Twitter, Apple, Google, and Amazon.





This article by Thala Labs and/or its affiliates (“we”, “us” and “our”) is for information purposes only. We do not provide tax, legal, insurance or investment advice, and nothing in this article should be construed as an offer to sell, a solicitation of an offer to buy, sell or issue or subscribe for, or a recommendation for any security, investment, cryptocurrency, token or other services, product or commodity by us or any third party. You alone are solely responsible for determining whether any purchase, sale, investment, security or strategy, or any other product or service, is appropriate or suitable for you based on your personal objectives and personal and financial situation and for evaluating the merits and risks associated with the use of the information in this article before making any decisions based on such information or other content. You should consult a lawyer and/or tax professional regarding your specific legal and/or tax situation. Past performance is no guarantee of future results. Therefore, you should not assume that the future performance of any specific investment, cryptocurrency, token, commodity or strategy will be profitable or equal to corresponding past performance levels. Inherent in any such transaction is the potential for loss. No recommendation or advice is being given as to whether any transaction is suitable for a particular person. By accessing this article, you acknowledge and agree to all of the foregoing and that you bear responsibility for your own research, due diligence and transaction decisions. You also agree that we, our affiliates and our respective directors, officers, employees, consultants, shareholders, members, representatives, advisors and agents will not be liable for any decision made or action taken by you and others based on this article, news, information, opinion, or any other material published, discussed or disseminated by us.

This article contains forward-looking statements or forward-looking information (referred to collectively as “forward-looking statements”). Forward-looking statements can be identified by words such as: “anticipate”, “intend”, “plan”, “goal”, “seek”, “believe”, “predict”, “project”, “estimate”, “expect”, “strategy”, “future”, “likely”, “may”, “should”, ”would”, “will”, and similar terms and phrases and the negatives of such expressions, including references to assumptions. Examples of forward-looking statements in this article include, among others, statements we make regarding our future plans, expectations and objectives.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: reliance on blockchain technology and blockchain technology service providers; digital asset transactions being irrevocable and losses occurring from such transactions; our use and reliance on proprietary data and intellectual property in its business; potential misuses of digital assets and malicious actors in the digital asset industry; digital assets potentially being subject to hold periods; developments and changes in laws and regulations; and disruptions to our technology network including computer systems, software and cloud data, or other disruptions of our operating systems, structures or equipment. Readers are cautioned that the foregoing list is not exhaustive.

Any forward-looking statement made by us in this article is based only on information currently available to us and speaks only as of the date on which it is made. Except as required by applicable securities laws, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.



Thala Labs

Thala is a decentralized finance protocol on the Aptos blockchain.