Volatile Pool

A volatile pool is a liquidity pool designed for trading assets with high price volatility (e.g., APT/USDC).

• Higher risk of price fluctuation compared to stable pools.

• Typically used for token pairs without a strong price peg.

• Standard swap fee for volatile pools: 0.1%.

Volatile Pool Formula

Volatile pools use the constant product market maker formula:

Where:

• x = reserve of token_1

• y = reserve of token_2

• k = constant (invariant), must remain unchanged after each swap

Explanation:

• When a user swaps one token, the product of the two reserves (k) stays constant.

• This design ensures continuous liquidity but introduces price slippage, especially for large trades.

How To Create Volatile Pool

Use the create_pool function from the router module.

public entry fun create_pool(
        token_1: Object<Metadata>,
        token_2: Object<Metadata>,
        is_stable: bool,
    ) {
        ...
    }

Function Parameters