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solana-program-library/token-swap/proposals/ProactiveMarketMaking.md

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Proactive market making curve for token-swap

Add additional curve to token-swap program that support proactive market making.

The core of PMM is essentially calculating one integral and solving two quadratic equations. It is implemented in Dodo protocol described here.

As a part of PR please implement as described in [1] and [2].

For reference pricing formula is:

Where is defined to be the piecewise function below:



is the market price provided by an oracle, and is a parameter in the range (0, 1).

The funding pool of PMM is described by four parameters:

: base token regression target - total number of base tokens deposited by liquidity providers : quote token regression target - total number of quote tokens deposited by liquidity providers : base token balance - number of base tokens currently in the pool : quote token balance - number of quote tokens currently in the pool