AMM Trading Engine
The Automated Market Maker (AMM) trading engine provides continuous liquidity for Social Proof Tokens using quadratic pricing curves and a rug-pull resistant design. This system enables sub-second transaction processing and high-volume trading, optimized for social media-driven economies.
How the AMM Works
Unlike traditional order books, the AMM offers always-available liquidity through algorithmic pricing. Key features include:
Immediate execution: trades execute instantly, no counterparties needed
Price discovery: mathematical curves adjust prices based on supply and demand
Scalable liquidity: handles high transaction volumes
Rug-pull resistant: creators cannot manipulate their own token markets
Quadratic Pricing Formula
The AMM uses a quadratic pricing curve:
Price = Base Price + (Quadratic Coefficient × Supply²)Default Parameters:
Base Price: 0.1 MySo (100,000,000 smallest units)
Quadratic Coefficient: 100,000 (adjustable by governance)
Example Calculations:
Supply: 100 tokens → Price = 1.1 MySo per token
Supply: 1,000 tokens → Price = 100.1 MySo per token
Supply: 5,000 tokens → Price = 2,500.1 MySo per token
Trading Mechanics
Buy Process:
Validation: check trading not halted, sufficient funds, block list status
Price calculation: quadratic integration for total cost
Fee deduction: 1.5% total trading fees
Pool update: add net MySo to pool, mint tokens to buyer
Balance tracking: update holder balances and circulating supply
Sell Process:
Validation: verify token ownership, sufficient balance
Price calculation: reverse quadratic integration for refund
Fee deduction: 1.5% total trading fees
Pool update: remove MySo from pool, burn tokens from seller
Transfer: send net refund to seller
Hold Limits:
5% of total token supply per wallet (dynamic, enforced on every purchase)
Block List Integration:
Bidirectional blocking: blocked users cannot buy tokens from users who blocked them
Platform-level blocks: platform operators can restrict access
Creator protection: token creators protected from harassment
Real-time checks: block status verified at transaction time
Self-Trading Prevention:
Token creators cannot buy their own tokens
Prevents artificial pumping and ensures market integrity
Performance and Scalability
Sub-second execution, thousands of concurrent trades supported
Optimized data structures for fast lookups and minimal blockchain overhead
Market Dynamics
Prices rise as community interest increases; quadratic curve dampens volatility
Liquidity pools grow as tokens are bought; sellers always have exit liquidity at curve-determined prices
Supports organic growth, profit realization, and fair market discovery
The AMM Trading Engine creates a sophisticated, scalable, and manipulation-resistant marketplace for Social Proof Tokens, enabling efficient price discovery and market integrity.
Emergency trading controls may be activated by governance in exceptional circumstances.
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