DiamondSwap SqrtPriceMath Library

The DiamondSwap SqrtPriceMath Library provides utility functions for calculating square root prices, adjusting liquidity, and determining the price impact of swaps within the DiamondSwap protocol. These functions are crucial for ensuring accurate price and liquidity calculations, especially when dealing with concentrated liquidity and tick-based price ranges. Below is a detailed breakdown of the functions within the DiamondSwap SqrtPriceMath Library.

Functions

getNextSqrtPriceFromInput(uint160 sqrtPriceX96, uint128 liquidity, uint256 amountIn, bool zeroForOne) → uint160

This function calculates the next square root price after a swap, given the input amount of tokens. It uses the current square root price, the liquidity in the pool, and the amount of input tokens to determine the resulting square root price.

• sqrtPriceX96: The current square root price, represented as a Q64.96 fixed-point number.
• liquidity: The current liquidity in the pool.
• amountIn: The amount of input tokens being swapped.
• zeroForOne: A boolean indicating the direction of the swap. If true, token0 is swapped for token1; if false, token1 is swapped for token0.
• Returns: The next square root price after the swap, as a uint160.

This function is essential for determining the new price after a swap, ensuring that the correct price movement is calculated based on the input amount and direction of the trade.

getNextSqrtPriceFromOutput(uint160 sqrtPriceX96, uint128 liquidity, uint256 amountOut, bool zeroForOne) → uint160

This function calculates the next square root price after a swap, given the output amount of tokens. It uses the current square root price, the liquidity in the pool, and the amount of output tokens to determine the resulting square root price.

• sqrtPriceX96: The current square root price, represented as a Q64.96 fixed-point number.
• liquidity: The current liquidity in the pool.
• amountOut: The amount of output tokens being swapped.
• zeroForOne: A boolean indicating the direction of the swap. If true, token0 is swapped for token1; if false, token1 is swapped for token0.
• Returns: The next square root price after the swap, as a uint160.

This function is particularly useful when calculating the price impact of swaps where the desired output amount is known, allowing for accurate price adjustments based on the resulting token output.

getAmount0Delta(uint160 sqrtPriceAX96, uint160 sqrtPriceBX96, uint128 liquidity, bool roundUp) → uint256

This function calculates the amount of token0 required to move the price from one square root price to another, given the liquidity in the pool. The function can round the result up or down, depending on the roundUp parameter.

• sqrtPriceAX96: The initial square root price, represented as a Q64.96 fixed-point number.
• sqrtPriceBX96: The final square root price, represented as a Q64.96 fixed-point number.
• liquidity: The liquidity in the pool.
• roundUp: A boolean indicating whether to round the result up.
• Returns: The amount of token0 required to move the price, as a uint256.

This function is essential for determining how much token0 is needed to adjust the price range within the pool, especially when managing liquidity positions.

getAmount1Delta(uint160 sqrtPriceAX96, uint160 sqrtPriceBX96, uint128 liquidity, bool roundUp) → uint256

This function calculates the amount of token1 required to move the price from one square root price to another, given the liquidity in the pool. The function can round the result up or down, depending on the roundUp parameter.

• sqrtPriceAX96: The initial square root price, represented as a Q64.96 fixed-point number.
• sqrtPriceBX96: The final square root price, represented as a Q64.96 fixed-point number.
• liquidity: The liquidity in the pool.
• roundUp: A boolean indicating whether to round the result up.
• Returns: The amount of token1 required to move the price, as a uint256.

This function is useful for calculating the amount of token1 needed to adjust the price within the pool, allowing liquidity providers to manage their positions effectively.

Use Cases

The DiamondSwap SqrtPriceMath Library is particularly valuable in scenarios that involve precise price and liquidity calculations, including:

• Swap Price Calculation: The functions getNextSqrtPriceFromInput and getNextSqrtPriceFromOutput are essential for calculating the new price after a swap, ensuring accurate price adjustments based on the trade.
• Liquidity Management: The getAmount0Delta and getAmount1Delta functions allow liquidity providers to determine the exact amount of tokens needed to adjust their positions within specific price ranges.
• Concentrated Liquidity: In protocols like DiamondSwap that use concentrated liquidity, these functions help ensure that liquidity is allocated efficiently across the desired price ranges, maximizing returns for liquidity providers.

Conclusion

The DiamondSwap SqrtPriceMath Library provides essential utilities for calculating square root prices, adjusting liquidity, and determining price impacts within the DiamondSwap protocol. By using functions like getNextSqrtPriceFromInput, getNextSqrtPriceFromOutput, getAmount0Delta, and getAmount1Delta, developers and liquidity providers can accurately manage prices and liquidity positions, ensuring optimal performance within the pool. Whether you're building decentralized finance (DeFi) applications, managing liquidity, or implementing trading strategies, this library is a critical tool for working with prices and liquidity in the DiamondSwap ecosystem.