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Webinar: Simplified Example Token Side AMM


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This diagram represents a cryptocurrency trading and liquidity management system. It models the dynamics of buying and selling tokens with crypto coins, tracking token circulation, calculating token price in USD cents, and managing liquidity pools. The system includes mechanisms to simulate random events influencing the tokens sold and bought, through the use of Source nodes generating resources (tokens and crypto coins) at a variable rate, influenced by dice rolls, to represent market fluctuations or trading volumes.

At its core, the diagram utilizes Pools to represent various key components such as the amount of Crypto and Token available, Tokens Sold, Tokens in Circulation, and the Coin Value from the Market in cents. Registers play a crucial role in calculating the constant (k) based on the tokens and crypto available, determining the coins bought and sold based on current market conditions, and calculating the token price in USD cents, by considering the total crypto divided by billion-factor and the market price divided by token count. These calculations are dynamically updated based on the transactions simulated by Source nodes and the movement of resources between pools via Resource Connections, embodying the ever-changing nature of cryptocurrency markets. Significant elements like the Tokens Sold and Tokens Bought are accounted for, feeding into the calculations for buying and selling coins, reflecting a system’s response to trading activities within the simulated environment. Moreover, Drains are employed to represent the removal of resources from the system, symbolizing transactions or conversions that lead to a permanent decrease in available tokens or crypto coins. This comprehensive setup offers insights into the complexities of token trading, price fluctuations, and liquidity management within digital asset exchanges.


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