Technical
How BUMP's AMM Solves Music Liquidity
April 12, 2024•8 min read
The Liquidity Problem in Music
Investing in music has historically been highly illiquid. If you bought a stake in a song, it was nearly impossible to sell that stake until months or years later. BUMP solves this using an Automated Market Maker (AMM).
The Math of BUMP Swaps
We use the x * y = k formula. This ensures that there is always a price for a token, no matter how small or large the trade. By pairing USDC with Artist Tokens, BUMP creates a 24/7 marketplace that doesn't rely on order books or centralized exchanges.
Fee Distribution
Every swap contributes to both the artist and the platform. This creates a circular economy where trading activity directly supports the creator, even after the initial launchpad has ended.
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