🔨What is a Fixed Swap Pool?
BeanyPad will allow projects to list at a fixed price, which will be maintained for as long as there are tokens remaining in the original supply. This should ensure less volatility around a token launch.
Fixed Swap Pool:
A Fixed Swap Pool is a mechanism where tokens are offered at a fixed price, regardless of how many tokens are bought or sold. This is in contrast to traditional AMM liquidity pools where the price of tokens can fluctuate based on supply and demand.
Advantages of Fixed Swap Pool:
Stability: The token price remains stable during the launch, ensuring less volatility.
Transparency: Projects and investors can clearly see how much money was raised and how many tokens were sold. This is more transparent than in traditional AMM pools where price can vary greatly due to volatility.
Liquidity Pools in AMM Swap Platforms:
In traditional AMM platforms, a liquidity pool is a reservoir of two tokens. The price of tokens in the pool is determined by the ratio of these tokens. When users trade or swap tokens, this ratio changes, and so does the price.
Why Use a Fixed Swap Pool?
Fixed Swap Pools address some challenges that traditional AMM liquidity pools face:
Control Mechanisms: They prevent unfair token distribution and liquidity rug pulls, which are malicious events where liquidity providers remove their funds, causing the token price to crash.
Prevent Token Dumps: They can prevent large investors (often called "whales") from dumping their tokens on the market and crashing the price.
Reduce Costs: They can lower the costs associated with token offerings.
In traditional AMM pools, a popular token's price can skyrocket if many investors buy it. This is due to the price adjustment mechanism of AMMs. However, with a fixed swap pool, the price remains constant. This ensures that early investors don't get an unfair advantage and that the funds raised are used for the project's development.
In summary, while traditional AMM liquidity pools offer dynamic pricing based on supply and demand, Fixed Swap Pools offer tokens at a constant price. This can provide more stability and transparency during a token's launch phase.
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