Protocol Overview

Introducing Fizzswap's AMM-based Instant Swap Protocol

AMM is an innovative trading mechanism that evolved from order book-based DEXs to change the way we trade cryptocurrencies on-chain. Instead of buy/sell order books, liquidity pools created by liquidity providers allow traders to trade freely, and liquidity providers share any generated pool usage fees as revenue in proportion to their individual liquidity contributions. In addition, any holder of Silicon Compatible Token can become a liquidity provider.

The AMM mechanism of Fizzswap is based on the formula x * y = k where x = ETH, y = Token1 , and k = Constant Function. The token price range is set according to the quantity of each token when the corresponding liquidity pool is created. For example, if the liquidity supply of x (ETH) increases, the supply of y (Token1) decreases to maintain the constant function, k. In this way, the supply of each token in the liquidity pool is designed to fluctuate with prices set accordingly.

Structures of Services:

Swap

Fizzswap provides a seamless way to exchange one token for another at a rate determined by the ratio of token pairs within the liquidity pool.

Additionally, Fizzswap offers a "single-asset supply" option in its liquidity pool (V2, V3) services. This feature allows users to supply liquidity to a pool using a single asset, even if they only hold one of the pair tokens. The platform will automatically swap the single asset to create the required pair and add it to the pool.

Supply & Borrow (Coming soon)

Fizzswap's Supply & Borrow service allows anyone to freely supply or borrow tokens. Users can maintain liquidity without swapping assets, while simultaneously borrowing desired assets for trading.

• Suppliers receive aToken and LP rewards when supplying a single token to the pool, and can leverage the supplied asset as collateral to borrow other tokens.

• Borrowers pay a borrowing fee (APY) to the liquidity pool in exchange for borrowing assets. A portion of the fees paid by borrowers is distributed to suppliers as LP rewards through a smart contract.

Providing Liquidity (V2, V3)

Fizzswap supports various way of providing liquidity.

When participating in V2 pools, users receive Liquidity Provider (LP) tokens representing their share of assets in the pool. V2 participants earn a portion of the pool usage fees generated in the pool and may receive additional rewards based on their LP share.

V3 pools offer concentrated liquidity, maximizing asset efficiency. Liquidity providers can specify a price range for their supplied assets, ensuring they're only used within that range. Through the Concentrated Liquidity Market Maker (CLMM) design, providers can allocate capital more efficiently, leading to higher pool usage fees earnings.

When supplying liquidity to V3 pools, users receive V3 LP NFTs as proof of their share. Similar to V2, V3 participants earn pool usage fees and may receive additional rewards based on their LP share.

*Note that slippage (a difference in the estimated price at the point of transaction and the actual price at time of transaction) may occur in AMM-based swap protocols. In addition, a liquidity provider may experience Impermanent Loss (change in price of supplied assets compared to when they are supplied) as token prices in pools are adjusted by an AMM mechanism after the point of supply.

Please keep these risks in mind when providing liquidity or conducting transactions.