BUG Liquidity Pools

Bug Finance enables secure trading of digital assets with minimal fees and low slippage.

Slippage is the difference between the current market price of an asset and the price at which the actual trade/transaction is executed. This difference could result in a smaller amount (higher price paid) or a higher amount (lower price paid) of desired tokens returned from a trade.

Bug Finance offers two different types of liquidity pools based on the tokens being provided:

sAMM - for strongly correlated pairs, such as stablecoins

sAMM is a type of liquidity pool that is designed specifically for assets that are expected to consistently trade at near parity, such as stablecoins or synthetics. Unlike traditional AMMs, which use a constant product formula to calculate prices, sAMMs use a constant sum formula. This means that the total value of the assets in the pool is kept constant, rather than their product. When a user wants to trade one asset for another in an sAMM, their trade is matched with another user who is looking to trade the opposite pair. This helps to reduce slippage and price impact, making sAMMs particularly well-suited for stable assets. When using an sAMM with just two assets, the pool works similarly to a traditional exchange: users can place orders to buy or sell either asset, and the sAMM will match these orders with one another to facilitate trades.

$$x^3y + y^3x \geq k$$

vAMM - for uncorrelated pairs, such as $BUG and $MATIC (x^3y*y^3x≥k)

vAMM pools are a type of decentralized AMM that allows users to trade tokens directly with each other without the need for a central order book or intermediaries. They consist of two tokens that users can swap between, with the exchange rate determined by the relative supply and demand of each token. Users can add liquidity to a pool by providing both tokens in a certain ratio, which allows them to earn a portion of $BUG emissions allocated to the pool. They are typically used to trade more volatile tokens, as they can quickly adjust to changing market conditions.

$$x * y \geq k$$

Parameters

• x is the amount of the first asset in the pool

• y is the amount of the second asset in the same pool

• k is a fixed constant