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Auto Add Liquidity

What is Auto Add Liquidity?

In a decentralized exchange smart contract, the "auto add liquidity" function is responsible for periodically checking the current liquidity balance and adding or removing liquidity as needed to maintain a target liquidity level. The function may be triggered by an external call or by an internal timer that periodically calls the function.
To implement this function, the contract will typically include a number of other functions and variables, such as:
  • A function to retrieve the current liquidity balance
  • A function to add liquidity to the exchange, possibly by calling the transfer function on the ERC20 token contract to transfer the tokens to the exchange contract
  • A function to remove liquidity from the exchange, possibly by calling the transferFrom function on the ERC20 token contract to transfer the tokens out of the exchange contract
  • A function to calculate the amount of liquidity to add or remove, based on the current liquidity balance and the target liquidity values
  • Variables to track the target liquidity and target liquidity denominator, which can be set by an authorized caller using the setTargetLiquidity function
  • A flag to enable or disable automatic adding of liquidity, which can be set by an authorized caller using the setAutoAddLiquidity function
  • A variable to track the last time liquidity was added or removed, which can be used to determine when the next check for liquidity balance should occur
When the "auto add liquidity" function is called, it will first check whether automatic adding of liquidity is enabled. If it is not enabled, the function will simply return. If automatic adding of liquidity is enabled, the function will then retrieve the current liquidity balance and compare it to the target liquidity. If the current liquidity is below the target, it will calculate the amount of liquidity needed to reach the target and call the appropriate function to add the liquidity. If the current liquidity is above the target, it will calculate the amount of liquidity needed to reduce it to the target and call the appropriate function to remove the liquidity. It will then update the lastAddLiquidityTime variable to the current block timestamp to track the last time liquidity was added or removed.
This is a simplified example of how the "auto add liquidity" function could work in a smart contract. In practice, the specific implementation may vary depending on the requirements and design of the contract.

Codes For Auto Add Liquidity

This sample code contains functions related to liquidity in a decentralized exchange. The first function calculates the liquidity backing for a given accuracy value, using the balance of a given pair of tokens and the circulating supply of those tokens. The second function allows an authorized caller to enable or disable automatic adding of liquidity to the exchange. The third function allows an authorized caller to set the target liquidity and target liquidity denominator for the exchange. These functions can be used to manage and track liquidity in the decentralized exchange.

Get Liquidity Backing

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/**
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* @dev Get liquidity backing.
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*/
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function getLiquidityBacking(uint256 accuracy) public view returns (uint256) {
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return accuracy.mul(balanceOf(pair).mul(2)).div(getCirculatingSupply());
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}
getLiquidityBacking(uint256 accuracy) public view returns (uint256): This function calculates and returns the liquidity backing for a given accuracy value. The liquidity backing is calculated by multiplying the accuracy value by the balance of the given pair and then dividing the result by the circulating supply of the tokens. The balanceOf function is used to retrieve the balance of a given token and the getCirculatingSupply function returns the circulating supply of some tokens. The mul function is used to perform a multiplication and the div function is used to perform a division.

Set Auto Add Liquidity

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/**
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* @dev Set the status for add liquidity automation.
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*/
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function setAutoAddLiquidity(bool flag) external authorized {
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if(flag) {
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autoAddLiquidity = flag;
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lastAddLiquidityTime = block.timestamp;
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} else {
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autoAddLiquidity = flag;
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}
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}
setAutoAddLiquidity(bool flag) external authorized: This function allows an authorized caller to set a flag that indicates whether the contract should automatically add liquidity or not. If the flag argument is set to true, the autoAddLiquidity variable is set to true and the lastAddLiquidityTime variable is set to the current block's timestamp. If the flag argument is set to false, the autoAddLiquidity variable is set to false.

Set Target Liquidity

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/**
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* @dev Set settings for target liquidity.
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*/
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function setTargetLiquidity(uint256 target, uint256 denominator) external authorized {
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require(denominator >= target, "Set Target Liquidity: Target Liquidity should be lower or equal to Target Liquidity Denominator .");
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targetLiquidity = target;
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targetLiquidityDenominator = denominator;
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}
setTargetLiquidity(uint256 target, uint256 denominator) external authorized: This function allows an authorized caller to set the target liquidity and target liquidity denominator for the contract. It requires that the target value be less than or equal to the denominator value. If this requirement is met, the targetLiquidity and targetLiquidityDenominator variables are set to the provided target and denominator values, respectively. If the requirement is not met, the function will throw an exception with the error message "Set Target Liquidity: Target Liquidity should be lower or equal to Target Liquidity Denominator."
In order to fully implement automatic adding of liquidity in a smart contract, it may be necessary to include multiple functions that work together, depending on the specific design of the contract.
There are likely several other functions and code that would be required to fully implement automatic adding of liquidity in a solidity token smart contract. Here are a few examples of other functions that might be useful:
  • A function to retrieve the current liquidity balance
  • A function to add liquidity to the exchange, possibly by calling the transfer function on the ERC20 token contract to transfer the tokens to the exchange contract
  • A function to remove liquidity from the exchange, possibly by calling the transferFrom function on the ERC20 token contract to transfer the tokens out of the exchange contract
  • A function to calculate the amount of liquidity to add or remove, based on the current liquidity balance and the target liquidity values
  • A function to periodically check the liquidity balance and add or remove liquidity as needed, using the lastAddLiquidityTime variable to track the last time liquidity was added or removed
Additionally, you may want to include access control mechanisms, such as contract ownership and access control lists, to ensure that only authorized parties can add or remove liquidity from the exchange. You may also want to include event logs to track the adding and removing of liquidity.