CatPump
Overview
Cat Pump is the place wh ere memecoins are born, and degen are made.
At its core, Cat Pump is a permissionless decentralized fair launch platform. It provides a haven for nascent tokens and creators to get their footing in the DeFi world, while being a one-stop shop for degens looking to get in on projects at the earliest, pre-launch stage.
Cat Pump is an advanced platform that better supports its incubated protocols and offers greater flexibility to buyers. This is accomplished by:
Providing valuable degen exposure to emerging tokens and protocols
Allowing degens the earliest opportunity to buy and sell new tokens without the need for an expensive liquidity pool or gas cost. Degen Express acts as an in-house exchange for users to transact with ease.
If the pool holds more than 50% of the tokens, the price will not change and will trade at the floor price, ensuring users have a certain degree of protection even in the worst conditions. The value of the token will not fall below this predetermined minimum.
Overview
Cat Pump introduces a novel token issuance and trading model, which we call the LaunchSwap model, which combines the two formulas y/x=p and x * y=k. Its innovative pricing mechanism and exceptionally high liquidity make it a pool trading model that is very user-friendly. This document will provide a detailed explanation of the operational principles of the LaunchSwap model.
The operational principles of the y/x=p function will be a key focus of this document, as it is unique to the Cat Pump. Regarding the x*y=k product model, this logic is already well-established in the token trading market, and this document will not provide a detailed description, but relevant reference URLs will be listed for interested users to explore further through the links.
1. The LaunchSwap Model
1.1 Token Issuance
Upon deploying a token using the LaunchSwap model on the Cat Pump platform, the platform will establish a trading pool for the token pairs, with all tokens directly entering the trading pool. The issuers will adhere to a principle of no reservations.
1.2 Token Pricing Mechanism
The LaunchSwap model adheres to the y/x=p model as its foundation and follows the pricing mechanism derived from the x*y=k product model.
y/x = p model
x represents the number of tokens in the trading pool (i.e., the total issued quantity minus the quantity held by users);
y represents the quantity of ETH in the trading pool (i.e., the amount of ETH paid by users to obtain tokens);
p represents the current price of the token (in units of ETH).
Assuming a total issuance of 1000 tokens, the price curve of the token would be depicted as shown in the following graph. As the number of tokens in the trading pool approaches 0, the price of the token will become increasingly higher.
The price curve has an inflection point at M, where the trading pool contains 50% of the tokens. If the trading pool continues to decrease tokens and increase ETH (M1), the price of the token will rise; If the trading pool continues to increase tokens and decrease ETH (M2), the token price will remain at the floor price p0.
Following x*y = k product model
The x*y=k product model is a well-established underlying operational logic in the current DEXs. It refers to an automated market maker (AMM) model that uses a constant product formula. In a liquidity pool for a pair of tokens, the product of the quantities of the two tokens remains constant after each trade, maintaining the constant K.
For specific logic, you can refer to the following URL: https://docs.uniswap.org/contracts/v2/concepts/protocol-overview/how-uniswap-works
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