> ## Documentation Index
> Fetch the complete documentation index at: https://docs.xyzchain.org/llms.txt
> Use this file to discover all available pages before exploring further.

# AMM Overview

> Constant-product automated market maker for graduated tokens

# AMM Overview

The XYZ AMM is a **constant-product automated market maker** that provides trading for tokens that have graduated from the [Launchpad](/launchpad/overview). It uses the standard `x * y = k` formula, where trading fees stay in the pool to benefit liquidity providers.

## How It Works

The AMM maintains pools of two assets: **XYZ** and a **CW20 token**. The product of both reserves stays constant (minus fees):

```
xyz_reserve * token_reserve = k (constant)
```

When you swap XYZ for tokens, you add XYZ to the pool and remove tokens. The price adjusts automatically based on the ratio of reserves.

### Price Formula

```
output = output_reserve * input_after_fee / (input_reserve + input_after_fee)
```

Larger trades relative to pool size have more **price impact** (slippage). Deeper pools provide better prices.

## Pool Creation

Pools are created **automatically** when a launchpad token graduates. Only the launchpad contract (an authorized creator) can create new pools.

When a token graduates at its dynamic XYZ threshold:

| Asset | Amount Added to Pool                        |
| ----- | ------------------------------------------- |
| XYZ   | All curve reserves                          |
| Token | All unsold tokens from the curve (\~20.69M) |

This creates a pool with deep initial liquidity from day one.

## Fee Structure

| Fee           | Rate            | Details                                         |
| ------------- | --------------- | ----------------------------------------------- |
| Base swap fee | 1% (100 bps)    | Applied to all swaps; stays in the pool         |
| Augmented fee | 0-5% (optional) | Extra fee on new pools; auto-disables at target |

### How Fees Work

Swap fees are deducted from your input before the trade calculation. The fee tokens stay in the pool, increasing reserves. This means LP positions grow in value over time as fees accumulate -- the fee auto-compounds.

### Augmented Fee

Newly graduated pools may have a temporary augmented fee (up to 5%) on top of the base 1%. This extra fee auto-disables once the pool's total value reaches a target threshold. You can check the status:

```json theme={null}
{ "augmented_fee_status": { "token_address": "<cw20_token_address>" } }
```

Returns whether the augmented fee is `active`, the current pool value, and progress toward the target.

## Querying Pool Info

Get the current state of any pool:

```json theme={null}
{ "pool": { "token_address": "<cw20_token_address>" } }
```

Returns:

```typescript theme={null}
{
  token_address: string;
  xyz_reserve: string;      // XYZ in pool (uxyz)
  token_reserve: string;    // Tokens in pool (micro-units)
  lp_token_address: string; // LP token contract
  lp_total_supply: string;  // Total LP tokens minted
  price: string;            // Current price: XYZ per token
}
```

## Listing All Pools

```json theme={null}
{
  "all_pools": {
    "start_after": null,
    "limit": 10
  }
}
```

Returns up to 30 pools per page. Pass the last `token_address` as `start_after` for pagination.

## Next Steps

<CardGroup cols={2}>
  <Card title="Swapping" icon="repeat" href="/amm/swapping">
    Trade tokens on the AMM
  </Card>

  <Card title="Liquidity" icon="droplet" href="/amm/liquidity">
    Understand LP tokens and pool mechanics
  </Card>

  <Card title="Launchpad" icon="rocket" href="/launchpad/overview">
    How tokens reach the AMM via graduation
  </Card>
</CardGroup>