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Consideration on AMM parameters #4488
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Description
AMM pricing formula:
price = a * x + b
Considerations
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x= AMM provided liquidity: i.e. only the token minted through the AMM will be taken into account for price computation). This will make the semantics forbto be "initial unit price". I think that this is way more manageable than using thetoken_total_supplyfrom a runtime POV. - There are no trivial consraints for
a. Canabe zero? I don't think so, otherwise you should issue a sale usability - Can
bbe zero? I think it should if we allow a sale to havesale_price = 0. - Dangers of having
a,btoo high: Numeric overflow in price computation. But the eval function will protect against this. - Dangers of having
a,btoo low: Supply dilution (which can be view as vulnerability ) thus they should be set by the governance -
a,bshould be thought as on a$10^{-10}$ scale since we are quoting the price in HAPI
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