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The ADAFi Swap
ADAFi Swap works with an Automatic Market Maker (AMM), which is a smart contract that regulates trading. Since smart contracts are decentralized, users do not have to trade the order book of an exchange. Instead, they effectively trade with other users’ provided liquidity.
Figure 4: ADAFi Swap Automatic Market Maker (AMM)
What is important for a swap is the scalability of the blockchain it is built on. As shown previously, the Cardano blockchain is ready for high-frequency trading.

How to trade

Users that have Cardano Native Tokens can use them to trade on ADAFi Swap by connecting their non-custodial wallets. Trading never was so easy!
Margin trading will only allow a limited amount of assets at x3 margin upon launching, and will scale as the liquidity pools continue to grow on ADAFi Swap.

Listing

Anyone can list a Cardano Native Token on ADAFi Swap, but they will have to lock a minimum amount of liquidity for 12 months. Users are able to report malicious token duplicates and get a reward in ADAFI tokens for their contribution to protect traders. Projects may also set up farming pools on ADA Finance to incentivize liquidity providers.

Swap fee

There is a 0.3% fee for swapping tokens and 0.05% fee for stable coins or major pairs. These fees are split by liquidity providers, proportional to their contribution to liquidity reserves within the liquidity pool.
Swapping fees are immediately deposited into liquidity reserves. This increases the value of liquidity tokens, functioning as a payout to all liquidity providers, proportional to their share of the pool.
Fees are collected by burning liquidity tokens, effectively removing a proportional share of the underlying reserves.
Last modified 1mo ago