UTXO-Based AMM
Disclaimer: "UTXO-Based AMM" is a decentralized finance (DeFi) application built on the Bitcoin Cash blockchain. It is not a registered financial institution and is not subject to regulation by any government agency. By using this product, you understand that you are participating in a decentralized, open-source (will be open-sourced later) project and that the developers of the product make no guarantee of its performance or security. Investing in this product carries a high degree of risk, including the risk of losing all or a portion of your investment. The product is intended for use by experienced cryptocurrency investors who understand the risks associated with DeFi applications and blockchain-based investments. The product does not guarantee any returns and past performance is not indicative of future results. The product is built using smart contracts and is open-source, meaning that it is not controlled by any central party. While the developers have taken reasonable steps to ensure the security and integrity of the contracts, there is always a risk of bugs, errors, or other issues that could result in the loss of your investment. By using this product, you represent that you understand the risks associated with DeFi applications and are willing to assume them. The product makes no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the product or the information, products, services, or related graphics contained on the product for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
Whitepaper
https://github.com/fex-cash/fex/blob/main/whitepaper/fex_whitepaper.md
Initialize AMM Pool
If no one has created a pool of a token before, the user can initialize the pool.
Need to consolidate UTXO before initiating a pool (in order to make a UTXO with index 0).
Mint (Add) Liquidity
Users can add liquidity to AMM pools and benefit from a 0.4% transaction fee.
Burn (Reduce) Liquidity
Users can reduce liquidity and get BCH and tokens back. As users trade continuously in the pool, burning the same share of LPs can get more BCHs and tokens back.
Swap
Users can buy and sell tokens with AMM pools. During the swap, users need to pay a 0.6% commission, of which 0.2% of the BCHs and 0.2% of the tokens go to the liquidity provider and 0.2% of the BCHs go to the Fex.Cash project.
User Guide
Mint (Add) Liquidity
Go to the Swap tab, and click "Add Liquidity".
Then choose the token you want to add. If the pool has not yet been created, it enters initialization mode.
During the initialization, Fex will ask you to create a UTXO with index 0, just click "Consolidate".
When initializing the AMM pool, a small number of BCHs and tokens need to be burned off. And you can customize the initial price by setting the ratio of BCH and token. (e.g. 1 GM = 0.0001 BCH)
If the pool already exists, then you can add liquidity directly based on the current ratio.
After adding liquidity, you can view their LP tokens on the Asset tab.
Burn (Reduce) Liquidity
On the Asset tab, click the "Burn-LP" if you want to reduce the liquidity.
Then a message box will pop up asking you to enter the number of LP tokens you want to burn. After burning LP tokens, the corresponding BCH and token shares will be returned to your account.
Swap
Go to the Swap tab, and select the token you want to buy or sell. Then click the "Swap" and deal.
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