AMM & Liquidity

7.1 Model & Rationale

HyperSui uses an automated market maker (AMM) where prices evolve along a curve determined by pool reserves. The initial release prioritizes full-range liquidity for simplicity and predictable behavior; specialized pool types (e.g., range/CLMM or stable-swap curves) may be introduced incrementally once telemetry justifies the added complexity. The goal is transparent, resilient price formation with low operational overhead for LPs.

7.2 Fees & Pool Parameters

• Pool trading fee: published per pool (e.g., low/standard tiers).

• Protocol fee share: explicitly disclosed and routed to the treasury per Section 14.

• Displayed to users: fee amount and price impact are part of pre-trade review; pools show historical fee capture to inform LP decisions.

Exact bps values and protocol splits will be finalized post-audit and announced via the changelog before mainnet.

7.3 Impermanent Loss (IL) — Practical View

Providing liquidity exposes you to relative price changes of the pair. When one asset outperforms, the pool rebalances toward the underperformer; fees can offset IL in active markets but do not guarantee profit. HyperSui documentation and dashboards explain IL plainly and discourage over-sizing on thin pools. Start small, observe behavior through a few market cycles, and scale as comfort grows.

Illustrative (not a promise): if an asset doubles against its pair, a full-range LP typically ends up with more of the underperformer and less of the winner than if they had simply held both—fee income may or may not compensate, depending on realized volume.

7.4 APR Display & Methodology (Indicative)

• Fee APR: derived from on-chain data (e.g., trailing volume and fees vs. average TVL, annualized).

• Context, not commitment: numbers fluctuate with market conditions and pool depth; methodology is published to avoid misinterpretation.

7.5 Pool Creation & Safety

Pool creation will be permissionless but gated by clear warnings: first liquidity sets the price; incorrect decimals/addresses are costly; new pools can show unstable APRs until depth normalizes. Prefer official pools announced via verified channels, and always verify token addresses—symbols/icons can be spoofed