LP Mechanics and AMM Strategy
💧 LP Mechanics and AMM Strategy
Orypton's token distribution relies on automated market making through decentralized liquidity pools (LPs), primarily on platforms like Uniswap.
⮕ Initial Liquidity Setup
To enable price discovery and fair market access, an initial LP is seeded with:
20,000,000 $ORY tokens
$200,000 in USDT
This establishes the initial market price: USDT in pool / ORY tokens in pool = $0.01
The pool follows the constant product formula used in AMMs:
Where:
x= token reservey= USDT reservek= constant invariant
⮕ Elastic Range Strategy
Rather than setting fixed price ceilings, the marketmaker configures dynamic liquidity bands that adjust based on trading activity.
Key Principles:
High liquidity near the active price range, enabling stable, low-slippage trades.
Thinner liquidity as price moves away, reducing capital inefficiency.
Rebalancing triggers that adjust the range as $ORY appreciates over time.
For example, if demand pushes the price above the initial range, new liquidity can be added at higher bands without disrupting the pool.
This strategy ensures:
Organic price discovery
Capital-efficient liquidity deployment
Adaptive support for long-term token appreciation
⮕ Dynamic Rebalancing & Price Extension
Liquidity Bands: Adjusted periodically based on TWAP trends and trading volume.
Auto-Repositioning: New tranches of liquidity can be deployed at higher levels if upward price momentum is sustained.
No Artificial Caps: The system is designed to support scalable growth without predefined price ceilings.
By using an elastic and dynamically managed LP system, Orypton aligns token distribution with actual demand, while preserving fairness, liquidity efficiency, and price integrity.
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