Stabilizer Overview

Stabilizer is a zero-slippage automated market maker (AMM) built on a true constant-sum invariant and an internal stabilization mechanism that maintains perfect balance in every pool. Unlike constant-product or hybrid AMMs, Stabilizer separates price formation from rebalancing, allowing it to offer flat pricing, solvency, and consistently optimal execution without reliance on external oracles or arbitrage.

At its core, Stabilizer uses USDZ, its fully backed native stablecoin, to rebalance pools after every trade, ensuring that liquidity remains maximally efficient and that traders always receive 1:1 execution across supported stable assets.

How Stabilizer Works

Stabilizer enables zero-slippage stablecoin swaps with no arbitrage requirement, while paying LPs maximally efficient fees.

System Summary

• Deposit stablecoins → receive LP tokens representing a position in a constant-sum AMM with perfect 1:1 pricing.

• Swaps execute at zero slippage because the invariant is $x + y =k$, a perfectly flat price curve.

• After every trade, the protocol restores pool balance using USDZ, a fully collateralized, protocol-native stablecoin.

• Rebalancing uses a mint → swap → deposit and withdraw → swap → burn sequence: USDZ is minted where deficient and burned where excessive, keeping global USDZ supply unchanged.

• LPs earn trading fees without divergence loss, since all liquidity stays concentrated exactly at the peg and does not drift away from the 1:1 price.

• Traders, aggregators, and market makers route through Stabilizer because execution is strictly optimal: no slippage, no MEV, no arbitrage spread.

• Stabilizer launches with three initial pools: USDT/USDZ (T-Pool), USDC/USDZ (C-Pool), and USDS/USDZ (S-Pool), with additional pools scheduled to be added progressively following launch.

• Trading fees are configurable within a 0–100 bps (0–1%) range (70% of all trading fees are distributed to LPs, with the remainder accruing to the protocol).

• Governance may optionally activate emergency depeg fees to protect reserves during collateral stress.

Core Mechanics

1. User trades → pool becomes imbalanced

Example: swapping USDT → USDC pushes USDT/USDZ pool to $x_{_T} > y_{_T}$and USDC/USDZ to $x_{_C} < y_{_C}$

2. Protocol computes the imbalance, defined as the amountIn that must be injected into the pool to make it perfectly balanced. For the T-Pool, the Stabilizer must inject $\Delta y _{_T}$ USDZ according to:

$$\Delta y _{_T} = \frac{x _{_T} - y _{_T}}{2}$$

For the C-Pool, Stabilizer must inject $\Delta x _{_C}$ USDC in the amount computed as:

$$\Delta x _{_C} = \frac{y_{_C} - x_{_C}}{2}$$

3. Mint - Swap - Deposit sequence

Once the imbalance is computed, Stabilizer mints and swaps $\Delta y _{_T}$ USDZ in the T-Pool and obtains $\Delta x _{_T} = \Delta y _{_T}$ USDT, which is added to the protocol's USDT reserves. The pool then transitions to a balanced state, where: $x'_{_T} = y'_{_T}$:

$$x'_{_T} = x_{_T} - \Delta x _{_T} , \space \space \space \space \space y'_{_T} = y_{_T} + \Delta y _{_T}$$

4. Withdraw - Swap - Burn sequence

In the C-Pool , Stabilizer swaps $\Delta x _{_C}$ USDC, withdrawn from the protocol reserves, and obtains $\Delta y _{_C} = \Delta x _{_C}$ USDZ, which is burnt from the circulating supply. This operations moves the pool to its balanced configuration $x'_{_C} = y'_{_C}$, where:

$$x'_{_C} = x_{_C} + \Delta x _{_C} , \space \space \space \space \space y'_{_C} = y_{_C} - \Delta y _{_C}$$

Through these processes, each pool returns to its balanced state after every trade, USDZ supply remains globally unchanged, and reserves adjust in a way that preserves both local and global solvency.

Traders benefit from perfectly predictable 1:1 execution, LPs earn fees without exposure to impermanent loss, and aggregators gain access to deep, deterministic liquidity.

Because Stabilizer performs all rebalancing internally and deterministically, the protocol requires no arbitrage, no price oracles, and no external market participation to maintain balance, offering a stable, scalable foundation for zero-slippage stablecoin exchange