Pricing Mechanism

Each LPs builds its own independent trading curve by selecting the range of liquidity provided, and traders can trade with the liquidity provided by any LPs. Red means sold, green means to be sold.

In the figure, the price range provided by LP2 is from Bin3 to Bin7, providing three NFT assets. Therefore, the price transaction curve of LP2 is Bin3, Bin5 and Bin7. After one NFT #1 has been sold, the Bonding Curve of LP2 reaches Bin5, and the user interface shows that the prices of NFT #4 and NFT #6 are both Bin5. When NFT #4 is sold, the Bonding Curve of LP2 reaches Bin7, so the price of the remaining NFT #6 is Bin7. NFT liquidity between LP1, LP2, LP3 and LP4 is not shared, and NFT transactions and fee income are accounted for independently.

Advantages: This modification has reduced the complexity of NFT liquidation by binding LPs to their respective provided NFT assets, and the relationships between LPs are simpler without interfering with each other.

NFT Liquidity

LPs can only add NFT liquidity in the Price range at Floor Price or above the Floor Price when adding NFT liquidity, but cannot add NFT liquidity in the price range below the Floor Price. When the Trader sells NFTS to the Pool, the transaction can only be made at the Floor Price. Therefore, under the mechanism of Liquidity Book, the liquidity distribution of NFTS can only exist at and above the Floor Price.

FT Liquidity

LPs can only add liquidity in the price range at or below Best Offer when adding FT liquidity, but cannot add FT liquidity in the price range above Best Offer. When buying NFTS, traders can buy NFTS in any price range above Best Offer. Therefore, after the completion of the transaction, part of FT liquidity will precipitate on Best Offer. At this time, this part of liquidity is in a state to be activated and cannot be used. Only when the price range of the Best Offer reaches the field, the Liquidity of FT assets deposited in this part can be activated. Therefore, under the mechanism of Liquidity Book, the liquidity of FT can be distributed in the whole price range. However, only the FT liquidity at or below Best Offer can be activated and utilized.

Liquidity Strategy

Note that, in Sudoswap's bonding curve, LPs can choose different liquidity strategies, such as linear, exponential. In Midaswap, we only use arithmetic sequences in bins when adding liquidity, which indeed is exponential in bonding curve. For users who add liquidity using our front-end, we will automatically calculate the bin sequences according to the liquidity amounts and price ranges chosen by users. For users who directly add liquidity through contract, they have to set the input bin sequences as non-decreasing arithmetic sequences, such as [8388608, 8388611, 8388614], or [8388500, 8388500].