Liquidswap is the first Automated Market Maker (AMM) on the Aptos blockchain, developed by the Pontem Network team. Built using the Move programming language, Liquidswap facilitates decentralized token swaps through smart contracts on the Aptos mainnet. It offers a secure, fast, and efficient platform for peer-to-peer digital asset trading.

Liquidswap operates with liquidity pools where users can deposit paired tokens (e.g., X and Y) to create liquidity. The ratio of tokens in these pools determines their relative price and adjusts dynamically with each trade to ensure liquidity is maintained. The platform uses a dynamic fee structure managed by a DAO treasury and leverages Aptos' parallel execution engine for high-speed transactions. Liquidity providers are rewarded with LP tokens, representing their share in the pool.

For token swaps, Liquidswap applies a constant product formula for non-correlated tokens and a more complex formula for stable asset exchanges, minimizing slippage. Additionally, it features an emergency stop mechanism, ensuring the protocol can halt trading and liquidity creation during critical issues, with decentralized control transferring to the DAO after full testing.

LSD is the governance token of Liquidswap, enabling holders to participate in protocol decision-making. By staking LSD tokens, users can gain voting power and earn higher rewards, encouraging long-term engagement and sustainability. The total supply of LSD is capped at 42 million tokens.