KittenSwap Preview (3): Free AMM Liquidity without LP, a new way of distributing tokens, and AMO

1. You Don’t Need LPs for AMMs

Here we show it’s possible to have good liquidity without LP.

  1. In the beginning, let the contract claim it has 1000 ETH + 10000 token, even though there is only 0 ETH + 10000 token in the contract.
  2. The initial price of the token is 1000/10000 = 0.1 ETH per token.
  3. Albert sends 10 ETH to buy 99.01 token. The price is 0.101 ETH per token.
  4. The contract now claims it has 1010 ETH + 9900.99 token. The price is 0.1020 ETH per token.
  5. Betty sends 20 ETH to buy 192.25 token. The price is 0.10403 ETH per token.
  6. The contract now claims it has 1030 ETH + 9708.74 token. The price is 0.1061 ETH per token.
  7. Albert sells all 99.01 token for 10.40 ETH. The price is 0.1050 ETH per token.
  8. The contract now claims it has 1019.60 ETH + 9807.75 token. The price is 0.1040 ETH per token.
  9. Betty sells all 192.25 token for 19.60 ETH. The price is 0.1020 ETH per token.
  10. The contract claims it has 1000 ETH + 10000 token. The price is 0.1 ETH per token.

2. A New Way of Distributing Tokens

As an example of KittenSwap “Free Liquidity” innovation, we build a token LIQUID which will be released on https://www.kittenswap.org/ soon.

  • Its liquidity is always better than 2100 ETH. The price impact is small even for large orders.
  • Its price is always higher than 0.1 ETH, even if everyone sells.
  • When you transfer LIQUID, 0.6% of it is burned.
  • When you sell LIQUID, 0.6% of the received ETH will automatically buy back LIQUID and burn.
  • When you buy LIQUID, there is zero fee.
  • KittenSwap charges 0% (buy) + 0.6% (sell) = 0.6%.
  • Uniswap charges 0.3% (buy) + 0.3% (sell) = 0.6%.

3. A New Kind of Order : AMO

Finally, this means we can have a new kind of order on KittenSwap, besides limit order and WLO (discussed in part 1 of this series).

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