KittenSwap Preview (4): Shifting the Bonding Curve for Better Pricing in an AMM

1. What Happens When You Burn Tokens

  • Assume the initial virtual liquidity is 100 ETH + 1000 LIQUID.
  • Trader Albert swaps 25 ETH for 200 LIQUID ( because 125 * 800 = 100 * 1000 ).
  • Assume 50 LIQUID is burned for some reason. Now there are only 150 LIQUID circulating.
  • Now if all 150 LIQUID is sold to the contract, we can only get 19.73 ETH back (because 125 * 800 = 105.26 * 950).

2. The Formulas

3. The Secret in the Bonding Curve




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