# Pool Type

## Pool Configuration

Choosing the type of pool to use is straightforward based on a few simple factors. The primary being the expected price variations between the tokens in the pool. For most non-stable assets a Weighted Pool is the right choice. For assets that are stable like stablecoins or assets that are stable against each other with a known price rate (ex: wstETH/weth), a Composable Stable Pool allows for much deeper liquidity.

When deciding on the type of pool to utilize, there are several key factors to consider. The primary consideration is the anticipated price fluctuations between the tokens within the pool. In cases where the assets are non-stable, a Weighted Pool is typically the preferred option. However, for stable assets such as stablecoins or assets that have a known price ratio against each other, opting for a Composable Stable Pool provides the advantage of deeper liquidity.

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PHUX's flexibility knows no bounds, enabling the creation of diverse pool types incorporating tailored curves, logic, parameters, and beyond.The following will categorize various pool types and distinguish the distinct characteristics of PHUX capabilities
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## Weighted Pools

PHUX's Weighted Pools are an advanced version of the traditional AMM pools, like those found in Uniswap v1. They utilize Weighted Math, making them suitable for a wide range of scenarios, even when tokens don't have direct price correlation (e.g., DAI/WETH). Unlike other AMMs that only offer 50/50 weightings, PHUX's Weighted Pools allow users to create pools with multiple tokens and customize the weightings, such as 80/20 or 60/20/20 weightings.

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### &#x20;What are the benefits of Weighted Pools?

Weighted Pools not only offer users the flexibility to select their desired asset exposure while participating in liquidity provision but also serve as a good risk management option by allowing for dynamic weight adjustments, which can help mitigate the potential impact of impermanent loss during price surges.

For instance, if a user wishes to provide liquidity for PLS and HEX, they can choose the weight that aligns with their strategy. A pool with a higher emphasis on PLS suggests an expectation of larger gains for PLS, while a pool with a higher emphasis on HEX implies anticipated gains for HEX. An evenly balanced pool is suitable for assets expected to maintain proportional value in the long term.

### Impermanent Loss

Impermanent Loss refers to the value discrepancy between holding a set of assets and supplying liquidity for those assets.

Highly imbalanced pools, where one token is heavily favoured over another, experience reduced impermanent loss. However, this advantage comes at the cost of increased slippage during swaps, as one side lacks liquidity. As a solution to balance liquidity and mitigate impermanent loss, 80/20 pools have been known as a balanced compromise.



## Stable Pools

Composable Stable Pools are specifically tailored for assets anticipated to maintain a close-to-parity or known exchange rate during swaps. Leveraging Stable Math, these pools enable significant-sized swaps without encountering significant price impact. This significantly enhances capital efficiency for swaps involving similar or correlated assets.

These are Ideal for:

* Pegged tokens: Those that trade close to a 1:1 ratio, including stablecoins within the same currency (e.g., DAI, USDC, USDT) or synthetic assets like WPLS & WETH
* Correlated tokens:  tokens exhibit a near 1:1 ratio with a gradually changing exchange rate.

All these tokens come into play within the domain of stable swaps, fostering a balanced and efficient trading experience.

### Importance of Stable Swaps

The presence of Composable Stable Pools on PHUX brings forth a significant benefit: seamless integration within the same protocol as other pools. This integration proves advantageous in scenarios involving arbitrage between stablecoins, especially when a token is paired with two different stablecoins across various pools. By utilizing Batch Swaps on PHUX, these swaps can be consolidated into a single transaction, optimizing gas usage and efficiency.

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New types of pools that are not included in the initial launch but might be launched later on: Boosted Pools, Liquidity Bootstrapping Pools, Linear Pools, Managed Pools/Index.


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