Dear CoinEx users:
To improve the liquidity and standardization of CoinEx market and better promote the healthy development of our business ecology, we are scheduled to support AMM in stablecoin markets, which is applied with "constant product market maker formula" algorithm, improves fund utilization rate, and brings firm liquidity to the market in a certain price range.
Markets and price range
|
Markets |
USDC/USDT |
TUSD/USDT |
PAX/USDT |
DAI/USDT |
|
Initial price of liquidity pool |
1.0000 |
1.0000 |
1.0000 |
1.0000 |
|
Highest price of liquidity pool |
1.0050 |
1.0050 |
1.0050 |
1.0100 |
|
Lowest price of liquidity pool |
0.9950 |
0.9950 |
0.9950 |
0.9900 |
What is AMM?
Automated market making (AMM) can calculate the buying and selling price according to the formula, so as to provide continuous quotation for the market. In terms of the trading mechanism, CoinEx adopts AMM with order book so that the funds from liquidity pool will be systematically converted into order book.
About AMM Algorithm
There are two types of algorithm on CoinEx: One is “Infinite constant product market maker formula" algorithm, which characterized in the firm liquidity provision to the market no matter how large the order book is or how small the liquidity pool is, mainly adopted in normal markets (e.g. CET/USDT); The other is “Finite constant product market maker formula" algorithm that improves fund utilization rate and brings firm liquidity to the market in a certain price range.
Tx fees and MM Returns
Market which supports automated market making is an AMM market. Compared with normal market, AMM market adopts an independent fees system.
AMM (Stablecoin Markets): Both maker and taker is 0.1%.
AMM (Normal Markets): Both maker and taker is 0.3%.
Special fees are NOT applicable for VIP, market makers, nor users using CET for fees deduction. All users are qualified or market maker application, and 50% of the market's transaction fees will be rewarded to liquidity providers. (The all CET trading markets enjoy 100% of trading fees)
AMM Features
1. Yield from automated market making
LP ( Liquidity Provider) gains 50% of the trading fee generated in the pool as return in total . The return of a single LP depends on the proportion of assets the user owns in the pool.
2. Cumulate daily profit daily and withdraw all at once
The interests of LP (Liquidity Provider) earns from trading fee is calculated on a daily basis, and will be allocated to the user’s market making account before 4:00 (UTC) the next day. When LP removes the liquidity from the pool, the user’s cumulative interests will also be withdrawn all at once.
3. Free access, free of charge
Assets between Spot Account and Market Making Account can be transferred in real-time by adding and removing liquidity, and no fees will be charged during the operation.
Risk Warning
The assets in the Market Making Account will be injected Into the liquidity pool for automated market making. When the price fluctuates, there will be impermanent losses, and the amount of the two assets will change when the liquidity is removed. More details about impermanent losses
CoinEx reserves the right of final interpretation of the announcement.
CoinEx Team
May 19, 2021
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