⚡DAMM

ALEX DAMM introduces discrete liquidity bins, improved LP mechanics, and advanced swap types. Built for precision.

DAMM (Discrete Automated Market Maker) is the next-generation liquidity engine on ALEX DEX. It brings concentrated liquidity to Stacks by introducing price bins and virtual balances, giving liquidity providers (LPs) tighter control over how their funds are deployed.

Unlike traditional AMMs, DAMM allows users to provide liquidity to specific price ranges (bins), concentrating capital where it’s most likely to be used. This improves capital efficiency and gives LPs more control over their positions.

To learn about the math and architecture behind DAMM, check out the detailed breakdown on our Medium post.

🚀 Key Innovations in DAMM

🔸 Discrete Liquidity Bins

LPs no longer need to spread their liquidity across the entire price curve. Instead, they can choose specific “bins” (price ranges where they expect trading to occur). This lets them use their capital more efficiently by focusing it where it's most likely to be used.

🔸 Virtual Balances (Smoother Price Curves)

Virtual balances are imaginary tokens temporarily added to each bin’s reserves to simulate extra liquidity. This helps smooth out price transitions between bins, preventing sudden jumps when a bin’s real liquidity runs out. As a result, traders get more stable pricing even when liquidity is concentrated, without affecting how LPs manage their positions.

🔸 Improved Position Management

LPs can update their positions at any time by adding or removing a portion of their liquidity. The protocol supports batch actions, so instead of managing each price bin individually, LPs can add liquidity to multiple bins in one go or reduce all of them by a set percentage in a single step. This makes it easier to adjust to the market or manage exposure without needing to withdraw everything.

🔸 Flexible Fee Structure with LP Incentives

Each pool on DAMM can set its own trading fees when it’s created. These fees can be configured separately for each token in the pair, meaning the cost of swapping from Token X to Token Y can differ from the opposite direction. A portion of the collected fees can also be given back to LPs as extra rewards, helping attract and retain liquidity more effectively.

🔸 Advanced Swap Mechanics (IOC/FOK Orders and More)

DAMM preserves the simple experience of swapping tokens with a slippage setting, but also adds advanced features like Immediate-or-Cancel (IOC) and, in the future, Fill-or-Kill (FOK). These tools give traders more control over execution, helping avoid bad fills and improving trade precision.

▶️ Coming Soon

DAMM goes live this July on ALEX DEX. Get ready for smarter swaps and concentrated liquidity!

Support

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