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Consideration on AMM parameters #4488

@dobertRowneySr

Description

@dobertRowneySr

AMM pricing formula:

price = a * x + b

Considerations

  • 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 for b to be "initial unit price". I think that this is way more manageable than using the token_total_supply from a runtime POV.
  • There are no trivial consraints for a. Can a be zero? I don't think so, otherwise you should issue a sale usability
  • Can b be zero? I think it should if we allow a sale to have sale_price = 0.
  • Dangers of having a,b too high: Numeric overflow in price computation. But the eval function will protect against this.
  • Dangers of having a,b too low: Supply dilution (which can be view as vulnerability ) thus they should be set by the governance
  • a,b should be thought as on a $10^{-10}$ scale since we are quoting the price in HAPI

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