swap

Token Swap Protocol

A decentralized exchange (DEX) protocol implementing automated market maker (AMM) functionality for token swapping. This protocol enables users to exchange different assets through liquidity pools managed by the DEX.

Features

• Automated Market Making: Dynamic pricing based on pool state and asset ratios
• Pool State Management: Maintains liquidity pool data with pair balances
• Asset Flexibility: Supports swapping any asset types (AnyAsset)
• Fee Integration: Automatic transaction fee handling
• Change Management: Returns excess payment to buyers

How It Works

1. Pool Setup: DEX maintains liquidity pools with two assets (pair_a, pair_b)
2. Swap Request: Buyer specifies what they want (ask) and what they're offering (bid)
3. Pool Update: Pool balances are adjusted based on the swap amounts
4. Asset Exchange: Buyer receives the requested asset, pool gets the bid asset
5. Change Return: Any excess payment is returned to the buyer

Transaction Structure

• Inputs: Pool UTxO from DEX, payment from Buyer
• Outputs: Updated pool state, assets to buyer
• Redeemer: SwapParams containing ask and bid values

Parameters

• ask: AnyAsset - The asset and amount the buyer wants to receive
• bid: AnyAsset - The asset and amount the buyer is offering

Use Cases

• Token Trading: Exchange different cryptocurrencies or tokens
• Liquidity Provision: Enable trading pairs for various assets
• DeFi Integration: Foundation for more complex financial protocols
• Educational Examples: Learn AMM mechanics and pool management

This protocol demonstrates core DEX functionality and serves as a building block for decentralized trading systems.