Shared Liquidity & AMM
Power Launch uses a unified AMM model tailored for long-tail assets. There is no order book and no external market maker - the pool itself is the counterparty to every trade.
How trades execute
| Action | Trades Against |
|---|---|
| Buy a Long | Pool of Shorts + pool reserves |
| Buy a Short | Pool of Longs + pool reserves |
The mathematical curve forces long and short exposures to offset each other while maintaining positive reserves.
IMPORTANT
This bounds insolvency risk at the protocol level. No external market makers. No order books. The curve is the market.
Trade flow example
A trader wants to open a 100,000 token long position:
- Trader sends 100,000 tokens to the pool
- Pool adds the tokens to its reserve
- Pool calculates the long power coin amount based on the current curve price
- Trader receives long power coins representing their position
- The pool's long payoff increases, reserve increases, but Liquidity stays constant
Closing works in reverse - the trader returns power coins, the pool burns them, and tokens are returned based on the current curve price. The difference between entry and exit price is the trader's P&L.
TIP
Because longs and shorts trade against the same pool, liquidity is never fragmented. Every token launched through Power Launch has deep, unified liquidity from day one.