This is an idea I had since longtime.
Nowaday in all AMM there are tons of trading pairs. The more currencies, the more pairs and they grow exponentially. If we consider N currencies we have as possible pairs the combinations of pairs (you can calculate via binomial coefficient):
N = 3 → 3 pairs
N = 4 → 6 pairs
N = 5 → 10 pairs
N = 20 → 190 pairs!
But what if PNG is used as main hub, i.e. all the swaps have to pass via PNG? For example to swap AVAX to TIME we have AVAX–>PNG–>TIME. We could have only pairs made of CURRENCY:PNG, so that with N = 20 there are only 20 pairs (instead of 190) and still being able to trade any currency. Since there are always 2 hops per trade we could reduce the swap fees in PNG pairs to 0.15% (to have a total fee of 0.3%) and leave the CURRENCY:CURRENCY pairs to 0.3%.
- More liquidity since it’s not spread across many pairs. So less slippage, less spread.
- The PNG rewards can be allocated only to pairs with PNG.
- Better use case for PNG. All liquidity providers must have PNG to provide liquidity in the most used pairs.
- Easier router which can check paths via PNG.