🌀Swap
Last updated
Last updated
Multibit's Ordinals Automated Market Maker (OAMM) is a decentralized exchange protocol designed specifically for trading BRC tokens. It leverages the principles of automated market making to provide liquidity, enable seamless token swaps, and facilitate efficient price discovery for $ORDI and other paired tokens.
Users can swap between BRC20 tokens and the paired tokens directly within the AMM. By inputting the desired amount of one token, the AMM automatically calculates and executes the trade based on the current reserve ratios. This allows for seamless and instant token swaps at a fair market price.
Through the continuous trading activity and interaction with liquidity pools, an Ordinals AMM dynamically adjusts token prices based on the supply and demand of the traded assets. This process enables efficient price discovery, as prices are determined by the ratio of tokens within the pool.
Users can become liquidity providers by depositing an equal value of BRC20 tokens and the paired token into the liquidity pool. In return, they receive liquidity provider (LP) tokens representing their share of the pool. Liquidity providers earn trading fees proportional to their share of the pool and help ensure sufficient liquidity for traders.
It is the main gateway for Defi users to access the Ordinals ecosystem. Including AMM, NFT, GameFI, and Launchpad, it is the best choice for Brc20/Orc20 projects to get support.
There are very few Swap products released by teams in the Ordinals ecosystem (although they are not really live yet) but we can see that their documentation does not mention how the SWAP feature works and its advantages.
We refer to the UniSwap V3 AMM model, which makes liquidity more concentrated by allowing each liquidity provider to create individual price curves that provide liquidity within a specific price range band, which significantly increases the utilization of funds.
Concentrated liquidity provides better capital efficiency for liquidity providers.
Introducing the concept of active liquidity.
If the price of an asset traded in a given liquidity pool exceeds the LP's price range, the LP's liquidity is effectively removed from the pool and it stops earning fees. Preventing liquidity providers from continuing to buy tokens in the event that they fall, leading to increased loss rates. While it is entirely possible for there to be no liquidity in a given price range, in practice this would create a huge opportunity for liquidity providers to actually provide liquidity for that price range and start charging all transaction fees.
Solutions being integrated with partners...
