Introduction

• Liquidity Providers deposit tokens into the pool, receiving pool tokens (shares) in return, representing their ownership stake in the pool.
• The pool facilitates swaps initiated by traders, adjusting reserves and calculating swap quantities based on the AMM formula.
• Traders execute swaps by sending tokens to the pool, which adjusts reserves and token prices accordingly.
• Pool tokens (shares) entitle LPs to a portion of swap fees and represent their ownership in the liquidity pool.
• LPs can burn pool tokens (shares) to withdraw their liquidity from the pool.

Token Functions

Providing liquidity

The function allows LPs to provide liquidity to the pool. They receive pool tokens in exchange, based on the amount the transfer interactions hold. The process sends back the tokens in case the LP did not provide an equivalent value of tokens, unless the reserves are empty (in this case the LP sets the initial price)

• Action: "Provide" The process function the action is calling

  Handlers.add(
    "provide",
    Handlers.utils.hasMatchingTag("Action", "Provide"),
    provide.provide
  )
  

• Transfer-A: txID Token A transfer interaction to the AMM process

  -- transfer iteraction A
  local transferAID = message.Tags["Transfer-A"]
  

• Transfer-B: txID Token B transfer interaction to the AMM process

  -- transfer interaction B
  local transferBID = message.Tags["Transfer-B"]
  

Swapping

This function lets users swap between two tokens.

• Action: "Swap" The process function the action is calling

  Handlers.add(
    "swap",
    Handlers.utils.hasMatchingTag("Action", "Swap"),
    swap.swap
  )
  

• Transfer: txID The transfer interaction to the AMM process

• Expected-Output: integer The expected quantity of tokens to swap for

    -- expected output for slippage
    local expectedOutput = tonumber(message.Tags["Expected-Output"])
  

• Slippage-Tolerance: float (percentage) The tolerated price difference between the expected output and the actual output. If the difference is larger, the swap fails.

    -- slippage tolerance in %
    local slippageTolerance = tonumber(message.Tags["Slippage-Tolerance"])
  

• Pool: address ID of the AMM pool (must be the id of the AMM process)

Withdrawing liquidity