Overview

A summary of MintSwap's core product offerings & key concepts to better understand the token DEX.

MintSwap's DEX, derived from the well-known Uniswap V3 Protocol, is a peer-to-peer system designed for exchanging cryptocurrencies (ERC-20 Tokens) on the Mint blockchain.

AMM

MintSwap's core product is automated market makers (AMM).

Automated market makers are a form of decentralized exchange (DEX) that give users the ability to make on-chain trades of utility and governance tokens without interfacing with an order book, which are often inefficient and can be manipulated (spoof orders) for longer tail assets and on higher-latency chains.

AMM protocols accomplish this by pricing deposited liquidity against specific preset curves, available at any time of the day.

Due to this automation, traders can easily access liquidity for a broad range of assets while liquidity providers can earn trading fees on positions they deposit permissionlessly into an AMM.

More information on Uniswap: https://docs.uniswap.org/concepts/uniswap-protocol

Concentrated Liquidity

The defining idea is concentrated liquidity: liquidity that is allocated within a custom price range. liquidity providers may concentrate their capital to smaller price intervals than (0, ∞). traders are offered deeper liquidity around the mid-price, and LPs earn more trading fees with their capital. We call liquidity concentrated to a finite interval a position. LPs may have many different positions per pool, creating individualized price curves that reflect the preferences of each LP.

More information on Uniswap: https://docs.uniswap.org/concepts/protocol/concentrated-liquidity

Swaps & Fees

Swaps using the MintSwap protocol are different from traditional order book trades in that they are not executed against discrete orders on a first-in-first-out basis — rather, swaps execute against a passive pool of liquidity, with liquidity providers earning fees proportional to their capital committed.

More information about swaps: https://docs.uniswap.org/concepts/protocol/swaps

Swap fees are distributed pro-rata to all in-range liquidity at the time of the swap. If the spot price moves out of a position’s range, the given liquidity is no longer active and does not generate any fees. If the spot price reverses and reenters the position’s range, the position’s liquidity becomes active again and will generate fees.

More information about fees: https://docs.uniswap.org/concepts/protocol/fees