Alien's DEX

Alien's DEX is a decentralized AMM protocol that supports Tezos-built token swaps. Alien's Exchange was created by using QuipuSwap token-to-token smart contracts fork.

What is AMM?

AMM (Automated Market Maker) is a protocol that powers decentralized exchanges (DEX). Centralized exchanges (CEX) rely on a traditional market structure of buyers and sellers whereas AMM allows DEX to simulate this system by using liquidity pools instead where token prices are determined by a constant mathematical formula based on supply/demand dynamics.

How does a CEX work?

In a traditional centralized market buyers and sellers offer their prices, forming bids. When other users find a price acceptable they close a deal and the price at which the deal was closed becomes the asset’s new market price.

Market makers on traditional markets benefit from the buy/sell price difference and thus they are incentivised to maintain the asset’s liquidity.

How does a DEX work?

Decentralized markets are not powered by a traditional buyer/seller interaction but rely solely on liquidity pools where assets are always available for sale for a price determined automatically based on a constant mathematical formula.

Liquidity providers in decentralized markets are incentivised by fee rewards which creates the core of DeFi structure.

How to Make a Swap

To make a token swap on Alien’s Farm first connect your wallet to the dapp by clicking the Connect button in the upper right corner and choosing your wallet and account.

Next go to the Exchange page and click on the Swap tab. In the upper field pick the token you want to sell and specify the amount. In the lower field pick the token you want to buy. You can do this by typing the token’s name or pasting the token’s contract address.

Once ready, confirm the operation in your wallet

Note the two icons: a cog (Transaction Settings) and a clock (Transaction History).

Clicking the cog will take you to the transaction settings menu where you can adjust slippage tolerance (increase the chances of a transaction to go through by allowing a greater tolerance to the rate’s volatily) and disable multihops (restrict the swap to direct pairs only).

Clock icon takes you to your swap history on Alien’s Farm platform.

How to Add Liquidity

To add liquidity to an existing pool take the following steps:

Connect your wallet to the dapp by clicking the Connect button in the upper right corner and choosing your wallet and account.

Go to the Exchange page, then open the Liquidity tab and click Add Liquidity.

Select the two tokens that form the pair you wish to invest liquidity in. You can do this by typing the token’s name or pasting the token’s contract address. Choose the amount on one token, the algorithm will automatically calculate the amount of the second token you need to invest. If you do not have enough of the second token, you can buy them in the swap tab.

Once ready, confirm the operation in your wallet.

How to Remove Liquidity

To remove liquidity from a pool take the following steps:

Connect your wallet to the dapp by clicking the Connect button in the upper right corner and choosing your wallet and account.

Go to the Exchange page, then open the Liquidity tab and click Remove Liquidity.

Select the two tokens that form the pair you wish to invest liquidity in. You can do this by typing the token’s name or pasting the token’s contract address. Alternatively, directly paste the liquidity pool’s contract address in the Import an existing pool field.

Enter the amount you wish to withdraw and check. Note that it will be different from the sum you have invested due to the accumulated rewards and the situation in the pool. Click the Remove button.

Once ready, confirm the operation in your wallet.