V2 DEX
About Kinetix's UniV2-style Automated Market Maker (AMM)
Last updated
About Kinetix's UniV2-style Automated Market Maker (AMM)
Last updated
A UniV2-style DEX is an AMM allowing you to trade directly through liquidity pools, without the need for an intermediary or counter-party like on CEXs or order books.
These liquidity pools vary the price of a token based on the supply (liquidity) and demand (swap) of each pool. Orders are therefore automatically executed by the smart contract, according to the following formula: x*y = k where:
x = The Quantity of Token x
y = The Quantity of Token y
k = The Constant
Therefore, if x increases, then y decreases and vice versa, in order to keep K constant.
Thanks to this mechanism, our AMM allows our users to trade spot on Kava instantly, permission-less and in a non-custodial manner.
One can also become a market maker by providing liquidity to our pools and receive 0.3% of all fees generated by the pool where one deposits. Our users even have the option to create their own pools or ones that do not yet exist.
In order to find out how, refer to the next section where we present how to perform these three activities
For a Tutorial on how to LP on our V2 DEX, click the link below:
