AMM Swaps
XODEX provides a seamless Automated Market Maker (AMM) model that facilitates decentralized swaps across multiple blockchain networks. The AMM model, inspired by Uniswap's constant product formula, allows users to trade tokens directly from their wallets without relying on centralized order books. With the addition of concentrated liquidity, XODEX enables liquidity providers to maximize capital efficiency and traders to experience minimal slippage and optimal pricing.
Understanding AMM Models
What is an AMM?
An Automated Market Maker (AMM) is a decentralized tradingmechanism that eliminates the need for order books and central intermediaries. Instead, AMMs use liquidity pools where users provide liquidity for trading pairs. Prices are determined algorithmically using a formula, ensuring that trades are executed automatically based on the pool's reserves.
Concentrated Liquidity
Liquidity providers can allocate liquidity within specific price ranges. This allows for more efficient use of capital and enables liquidity providers to earn higher fees when trading occurs within their chosen ranges. By concentrating liquidity, providers can offer deeper liquidity with less capital, reducing slippage for traders and enhancing market efficiency.
Settlement Options
XODEX provides flexible settlement options for users who wish to receive swapped tokens on different networks. Here are two examples:
Example 1: Swapping KRC-20 Tokens on Kaspa
- Scenario: Swap KAS for KRC-20 Token on the Kaspa network.
- Steps:
- Select KAS as the token you want to swap and KRC-20 Token as the token you want to receive.
- Execute the swap on the Kaspa network using XODEX’s AMM.
- The swapped KRC-20 Token will be settled back to your Kaspa wallet.
This seamless swap process allows users to trade KRC-20 tokens within the Kaspa ecosystem without needing to bridge tokens to another network, layer or centralised service.
Example 2: Swapping Stablecoins or ETH to KAS and Receiving on Kaspa
- Scenario: Swap USDC (stablecoin) or ETH (Ethereum) for KAS (Kaspa’s native token) and settle on the Kaspa network.
- Steps:
- Select USDC(ETH) or ETH as the token you want to swap and KAS as the token you want to receive.
- Execute the swap on XODEX, which will automatically handle cross-chain messaging.
- The swapped KAS will be settled directly to your Kaspa wallet.
This cross-chain swap functionality enables users to seamlessly move assets between the Ethereum and Kaspa networks, providing flexibility and ease of use.
Benefits of AMM Swaps on XODEX
- Cross-Chain Flexibility: Trade tokens across different blockchains without needing to manually bridge assets. XODEX handles the routing and settlement, simplifying the user experience.
- Concentrated Liquidity: Liquidity providers can specify price ranges, optimizing capital efficiency and reducing slippage for traders.
- Decentralized and Secure: The entire process is trustless and secure.
- Low Fees and Fast Settlement: Leverage the low transaction fees and fast finality of Kaspa, combined with the broad liquidity and assets available on Ethereum and other supported networks.
- Enhanced Market Access: Access a wide range of tokens and trading pairs, including emerging assets like KRC-20 on Kaspa and established assets on Ethereum.
By providing a robust and flexible AMM model with cross-chain capabilities, XODEX ensures a comprehensive trading experience that meets the needs of both liquidity providers and traders across various blockchain networks.