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The AMM and the liquidity pool

War of Coins is a DeFi product that utilizes the Automatic Market Making (AMM) protocol which operates with the aid of liquidity pools and comprehensive risk management. The liquidity pools will be made public with certain rules and conditions, all participants gain the opportunity to earn passive income via dividend and pool value appreciation.

Highlights

01
AMM Fund allocation

For each trading session, the allocated fund is divided into several slots, each corresponding to various maximum payout levels, such as 100, 50, 20, 10, 5 and 2 times. Trading session begins with the 100 times slot active, and once the fund allocated for that slot is exhausted, the system will switch to the next lower payout slot. Overall, the allocated fund guarantees the coverage of all trading positions.

02
Risk management

War of Coins employs a sophisticated risk management strategy to ensure the potential payout of our users' positions. the liquidity pool is never fully exposed to overall risk at any time, instead, only certain portion of total fund in the liquidity pool is allocated for current active sessions. It guarantees continuous operation even when one of trading sessions encounters the max payout.

03
Dividend

Liquidity providers qualify dividend from the profit made by the options writing, the amount is proportional to their contributions towards the liquidity pool. The dividend consists of both cash dividend and liquidity pool value appreciation.  

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