SpiritSwap provides users a simple way to swap tokens on Fantom via automated liquidity pools
SpiritSwap provides users a simple way to swap tokens on Fantom via automated liquidity pools. In a swap, one token is sold to buy another token. The rate of the swap is determined by the AMM with the equation:
Where x = the number of $AAA tokens, y = the number of $BBB tokens, and k is a constant. The trader is charged a 0.18% fee to make a swap.
In Figure 1, a trader is swapping $AAA token for $BBB tokens. The trader sends 100 $AAA tokens to the AMM. A 0.18% fee is applied and 0.18 $AAA tokens are not included in the swap. The remaining 99.82 $AAA tokens are swapped in the AMM to $BBB tokens. Since the AMM will be losing $BBB tokens, it must gain $AAA tokens to keep k constant. The equation:
Can be solved for y to give the number of $BBB tokens that the trader will receive. The 0.18% fee of 0.18 $AAA tokens are directly added to the liquidity pool reserves, slightly increasing the value of k.