Fusang Support

Fusang Swap operates on an Automated Market Maker (“AMM”) protocol. Unlike traditional exchanges that use an "order book" to match buyers and sellers, an AMM allows you to trade directly against a Liquidity Pool (“Pool”).

• Constant Availability: You can swap at any time (24/7) without needing a specific counterparty to be online at the same time.

Smart Contract Execution: Every trade is handled by a self-executing smart contract, ensuring that the rules of the trade are immutable and transparent.

Fusang Swap utilises the constant product formula, expressed as:

x · y = k

x and y: These represent the quantity of the two (2) tokens in the Pool (e.g., FUSD and STOKEN).

k: This represents a constant value that must remain unchanged after every trade.

How it works: When you buy Token X, you add Token Y to the Pool. To keep k constant, the Pool must decrease the amount of Token X it holds. This mathematical shift automatically adjusts the price—as an asset becomes scarcer in the Pool, its price increases.

Every trade on Fusang Swap involves three (3) distinct costs:

1. Liquidity Provider (“LP”) Fee: This is a small percentage (typically between 0.05%, 0.3% and 1.00%) charged on each trade. This fee is paid directly to the members who provide the liquidity for the Pool.
2. Network Cost (“Gas”): Since every swap is recorded as a blockchain transaction, you must pay a Gas fee to the network validators. This is paid in the network’s native token (e.g., ETH).

Price Impact: This is not a direct fee, but rather a cost of trading. Large trades relative to a Pool's size will move the price, meaning the final price you get may be slightly less favourable than the initial quoted price.

Fee tier is the specific percentage of a trade that is paid to LPs as a reward for facilitating the swap.

Because we use a concentrated liquidity model, different trading pairs require different levels of compensation based on their risk and volatility. Instead of a single flat fee for the whole exchange, each liquidity pool can have a customised fee tier that best fits its assets.

Common Fee Tiers on Fusang Swap:

• 0.05%
• 0.30%
• 1.00%