Automated Market Maker (AMM)

The Automated Market Maker (AMM) is a separate and optional piece of software that can be run on the same computer as the Seller Wallet. It communicates with the DEX software in order to maintain a set or Orders. If an Order is taken by a Buyer, the AMM will replace the Order with an identical one. If the price fluctuates outside of a tolerance level (usually 5%), the AMM will delete the Order and replace it with a new one at the new price.

Orders are maintained through a JSON file. Here is an example of an orders.json file that instructs the AMM to maintain orders for a single token class (a4fb5c2da1aa064e25018a43f9165040071d9e984ba190c222a7f59053af84b2) in the following quantities: 0.1, 1, and 2 tokens. The price for the token is set to $0.01 USD per token. If the price deviates by more than 5%, the AMM will delete the existing Order and recreate a new Order at the current price.

[
  {
    "tokenId": "a4fb5c2da1aa064e25018a43f9165040071d9e984ba190c222a7f59053af84b2",
    "qty": 0.1,
    "pricePerToken": 0.01,
    "errorPercent": 0.05,
    "markup": 0.00,
    "priceAlgo": false
  },
  {
    "tokenId": "a4fb5c2da1aa064e25018a43f9165040071d9e984ba190c222a7f59053af84b2",
    "qty": 1,
    "pricePerToken": 0.01,
    "errorPercent": 0.05,
    "markup": 0.00,
    "priceAlgo": false
  },
  {
    "tokenId": "a4fb5c2da1aa064e25018a43f9165040071d9e984ba190c222a7f59053af84b2",
    "qty": 2,
    "pricePerToken": 0.01,
    "errorPercent": 0.05,
    "markup": 0.00,
    "priceAlgo": false
  }
]

Installation

For the AMM to operate, you must first setup a Seller Wallet, and have the Docker containers up and synced.

• Clone the repository.
  • git clone https://github.com/Permissionless-Software-Foundation/dex-amm
• Customize your own orders.json file and add it to the root directory of the repository.
  • cd dex-amm
  • cp ~/orders.json orders.json
• Pull down the Docker image for the AMM.
  • cd production/docker
  • docker-compose pull
• Run the Docker container.
  • docker-compose up -d

Once the Docker container is up and running, you can monitor it with this command:

• docker logs --tail 20 -f dex-amm

The AMM will check the DEX every 10 minutes. It will only modify one order per check.