Buttonwood Poolside Explained Simply

"Poolside liquidity hub for liquid receipt tokens & yield-bearing assets"

What is Buttonwood?

Buttonwood is a suite of DeFi primitives that facilitate the creation of advanced decentralized financial tools. A key insight of Buttonwood is the idea that all financial structures can essentially be broken down into tranches. The ButtonTranche contracts form the backbone for developing platforms that offer services like debt without liquidation, convertible bonds, options, and even stablecoins independent of fiat.

The Buttonwood Foundation was established based on the principle that the development of future financial systems (DeFi) requires an understanding of historical financial strategies and a foundational approach. While DeFi has incorporated elements like AMMs (Uniswap) and margin lending (Aave), it still lacks many components found in traditional financial systems.

The core contracts of Buttonwood are designed to be permissionless and highly composable, making it straightforward for developers to integrate these by just adding routers and a user interface.

Poolside AMM Explained Simply

Poolside functions as the central liquidity nexus within DeFi for liquid receipt tokens and yield-bearing assets. It is constructed around an innovative automated market maker (AMM) specifically tailored for liquidity providers (LPs) managing tokens such as liquid staking tokens (LSTs) that appreciate in value.

Poolside introduces a framework that acknowledges the yield generation of tokens, safeguarding this additional value from arbitrage losses. Unlike other AMMs, which subject LPs to potential forfeitures of staking rewards regardless of token or AMM design, Poolside addresses these common pitfalls and stands as the sole decentralized exchange (DEX) capable of supporting sustained, robust markets for LSTs, including Lido’s stETH and BENQI’s sAVAX.

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