Automated Market Maker

[alcueca]

Exercise name:        Automated Market Maker
Assignment #:         7
Track:                Smart contracts
Testing framework:    Foundry
Deployment framework: Foundry (forge create)
Node provider:        
Target network:       

Assignment summary

An Automated Market Maker facilitates trade between two ERC20 tokens (X and Y), supplied on construction. The AMM itself is an ERC20 token as well.

There are five user-facing functions, and no privileged accounts:

• Init: Supply x tokens of X and y tokens of Y to the contract. Mint z AMM tokens to sender, with z = x * y. Can only be called once.
• Mint: x and y are supplied to the contract in the same proportion as the respective reserves of the contract, called x_0 and y_0. This can be expressed as x_0 / x == y_0 / y. Mint z AMM tokens to sender as the proportion of their deposit to the AMM reserves, which can be expressed as z = x / x_0.
• Burn: z AMM tokens are burned. The AMM sends x and y tokens to the caller in the proportion of tokens burned to AMM total supply.
• Sell x: The user provides x tokens of X. If x_0 and y_0 are the AMM balances of X and Y, the AMM sends y to the user so that x_0 * y_0 == (x_0 + x) * (y_0 - y).
• Sell y: The user provides y tokens of Y. If x_0 and y_0 are the AMM balances of X and Y, the AMM sends y to the user so that x_0 * y_0 == (x_0 - x) * (y_0 + y).

Additional Details

Peripheral Goals