Ecosystem

Liquidity Flows

Buying and swapping aOS to either Solana or agent tokens is the only way liquidity enters or exit the protocol. Value is exclusively brought into and from the agentOS Protocol is through the single aOS/SOL token pair. An illustratory graphic is placed below.

Liquidity Inflows and Outflows are only possible through the aOS/SOL pair, that then enables macro activities and USD valuations within the Protocol. The USD (or any fiat) value of all actions is based on the value of aOS in the Solana pair, which is derived from a standard constant factor pool.

Now that you understand how the base pair^[what?] is the only bridge for value to enter or leave the aOS ecosystem, it is equally important to understand how behavior is governed by the constant product formula and why this is the method employed.

Core Economics

In the aOS/SOL Liquidity Pool, the pair consists of

• $RaOS​$ be the total reserve of aOS tokens in the pool

• $RSOL​$ be the total reserve of SOL tokens in the pool.

The core relationship is defined by the invariant $k$

This product $k$ must remain constant (ignoring fees) after every swap.

DAMMs emerged as a direct response to the limitations of early AMMs (Automated Market Makers), particularly the issue of impermanent loss. Protocols began introducing dynamic features around 2020-2021 to improve capital efficiency.

agentOS utilizes the DAMM liquidity pools on Meteora DEX.

When a user wants to enter the ecosystem, they swap SOL for aOS.

• A user adds an amount $ΔSOL​$ to the pool

• They receive an amount $ΔaOS​$ from the pool.

The new state of the pool must satisfy the invariant:

Solving for the amount of aOS the user receives ($ΔaOS​$), we get

This action increases the amount of SOL in the pool and decreases the amount of aOS, causing the price of aOS to rise.

When a user wants to exit the ecosystem, they swap aOS back to SOL.

• A user adds an amount $ΔaOS​$ to the pool.

• They receive an amount $ΔSOL​$ from the pool.

The new state is:

Solving for the amount of SOL the user receives ($ΔSOL​$), we get:

This is the outflow of value, where aOS is returned to the pool in exchange for SOL, causing the price of aOS to drop.

Price Discovery Formula

When talking about price, users colloquially refer to the USD value of an asset since there is no dollar on-chain, only representations of it. The price of aOS in terms of SOL is determined by the ratio of the reserves in this pool. The external fiat (USD) value is derived from this.

This is the foundational method for valuating all activities inside the protocol in terms of dollars. We will take an example from the user interface.

Within the dApp, you can see how USD value representation is prioritized in the UI. Note that the market cap value is also in USD. Using statistics from the image shared earlier, if 1 ASTRAE token is valued at 0.1154 aOS = 0.002493 USD, the total market cap of VANA would be 1,000,000 * 0.002493.