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AMM & CLMM Architecture

MuchFi provides both Constant-Product (AMMs) and Concentrated Liquidity Market Makers (CLMMs), allowing liquidity providers and token issuers to choose the model best suited to their needs. The constant-product AMM is forked from Uniswap V2 with platform-specific optimizations, while the CLMM follows modern concentrated liquidity designs inspired by Uniswap V3 style mechanics.

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Overview

For new token launches, MuchFi leverages:
  • 20% of token supply reserved at creation
  • DOGE raised from the bonding curve
These assets are paired to seed initial liquidity. Tokens launched through the permissionless launcher begin trading immediately using the constant-product AMM, ensuring instant market availability. As markets mature, liquidity can transition to CLMM pools for improved capital efficiency.

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Core AMM Mechanism (Constant Product)

The constant-product AMM operates through liquidity pools containing crowdsourced assets:
  • Equal-Value Deposits
    Liquidity providers (LPs) deposit equal-value amounts of token pairs in a 50/50 distribution.
  • Pricing Formula
    Prices are determined by the classic x * y = k invariant, where the product of both token reserves remains constant as balances shift.

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Concentrated Liquidity (CLMM)

MuchFi also supports Concentrated Liquidity Market Makers, enabling LPs to deploy capital within specific price ranges. Key characteristics:
  • Capital Efficiency – Liquidity is focused where trading activity occurs
  • Custom Price Ranges – LPs choose active bands for their liquidity
  • Higher Fee Potential – Tighter ranges can generate greater fee yield
  • Active Management – Positions require monitoring and rebalancing
CLMMs are best suited for mature, higher-volume assets where tighter spreads and deeper liquidity near spot price are desired.

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Why AMMs Excel for Long-Tail Tokens

For early-stage and long-tail assets, constant-product AMMs provide four key advantages:

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Accessible Liquidity

Markets can exist without professional market makers. Any token can be liquid from day one.

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Lower LP Barrier

Minimal capital requirements enable broad community participation.

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Predictable Pricing

The x * y = k curve delivers transparent, algorithmic price discovery.

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Community-Driven

Token communities can bootstrap liquidity organically through LP incentives.

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Why Offer Both AMM and CLMM?

Each model excels in different market conditions:
  • Constant-Product AMM
    • Passive liquidity provision
    • Full-range price coverage
    • Ideal for bootstrapping and long-tail assets
  • CLMM
    • Capital-efficient liquidity
    • Tighter spreads
    • Best for established, high-volume markets

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Strategic Separation

MuchFi maintains a clear division of responsibilities:
  • Constant-Product AMMs → Liquidity bootstrapping and long-tail assets
  • CLMMs & CLOBs → Mature tokens and high-efficiency trading
This modular approach ensures each liquidity mechanism operates where it performs best, without compromising accessibility or decentralization.