Basics

Key features of the Codex AMM include:

Automated Market Maker (AMM)

Codex operates as an AMM, allowing users to trade ERC-20 tokens directly from their wallets without the need for a centralized intermediary. Instead of relying on traditional order books, Codex uses liquidity pools.

Liquidity Pools

Users provide liquidity to Codex by depositing an equal value of two tokens into a liquidity pool. These pools facilitate decentralized trading by allowing users to swap between tokens instantly. Liquidity providers earn fees from trades made in the pool.

Constant Product Market Maker Formula

Codex uses a mathematical formula, the constant product market maker formula, to determine the exchange rate between two tokens in a liquidity pool. This model helps maintain liquidity and enables efficient token swaps.

Permissionless Listing

Anyone can create a new liquidity pool for any ERC-20 token pair without seeking approval. This permissionless listing mechanism contributes to the platform's openness and accessibility.

Flash Swaps

Codex introduced flash swaps, enabling users to borrow tokens from the liquidity pool without requiring collateral. However, users must return the borrowed tokens within the same transaction.