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Kibble's liquidity pools allow anyone to provide liquidity by adding their assets to a pool.
Last updated
Kibble's liquidity pools allow anyone to provide liquidity by adding their assets to a pool.
Last updated
In each Kibble liquidity pool, which serves as a trading venue for a specific token pair on TON, the process begins with the creation of a pool contract. Initially, the balances of each token within the pool are set to 0. To enable the pool to facilitate trades, an initial deposit of each token is required.
The individual who provides this initial liquidity becomes the first liquidity provider and plays a crucial role in setting the initial price of the pool. It's incentivized for this provider to deposit an equal value of both tokens into the pool.
This equilibrium is essential because if the initial liquidity provider were to deposit tokens at a ratio different from the current market rate, it would immediately create a profitable arbitrage opportunity. This imbalance is likely to be exploited by external parties seeking to capitalize on the discrepancy in token prices.
In the initial step of providing liquidity to the KIB/USDT pair, users begin by initiating a transfer of USDT tokens to their personal wallet. This transfer includes a custom payload, facilitating the subsequent steps of the liquidity provision process.
Once this transfer is confirmed by the Kibble Router, indicating successful completion, the Pool contract is activated. The Pool contract then proceeds to route the liquidity provision request to KIB User's specific Account contract. This marks the conclusion of the first phase of the process, during which the Account contract does not generate any additional transactions.
Following the initial liquidity provision process, users proceed with another transfer, this time involving the other token or KIB, using the same method as before.
However, in this instance, the Account contract generates a new message to the Pool contract, instructing it to mint new liquidity tokens. This marks the continuation of users's involvement in the liquidity provision process, contributing to the expansion and functionality of the liquidity pool.
