Wick AMM

what is wAMM

wAMM (Wick AMM) is Wick's state-of-the-art AMM. It organizes liquidity into discrete price bins: each bin trades at a fixed price, so swaps within a bin have zero price impact.

Every wAMM feature runs on the bins themselves. Limit orders rest as real liquidity in a bin, and Wick arbitrage keeps every bin at fair value, so orders fill efficiently. Dynamic fees pay the liquidity for its risk, and options settle against it.

how wAMM works

wAMM uses DLMM as the base layer for active markets on Lighter EVM. LPs deploy liquidity into bins with preset or custom shapes; traders get zero price impact inside each bin. Hooks and dynamic fees layer onto that base, and the UI adds Paint and orderbook-style depth.

Swap fees compound automatically into your position, unlike Uniswap V3, which has a separate claim step. Bin liquidity, including resting limit orders and options, maps to CEX-style bid/ask depth:

Capital concentrates around the market price the way an orderbook concentrates depth, and full-range pairs remain available for set-and-forget liquidity.

how bins work

Bins are the price grid of a DLMM pool. Each bin is a single fixed price point. Consecutive bins are spaced by the pool's bin step, a percentage gap set at pool creation:

price_n = price_{n-1} × (1 + binStep / 10_000)

Example: a 1 bp bin step on a USDC/LIT pool at $1.70 gives next bins at $1.7002, $1.7003, and so on. Smaller steps suit stable or correlated pools; larger steps suit volatile pools with fewer bin crossings per swap.

The active bin is the bin at the current market price: swaps execute there, and your position earns swap fees while price stays inside the bins where you deployed liquidity. Bins below spot act as bids; bins above act as asks.

bin step tiers

Wick pools are identified by bin step. Values below describe price granularity and typical pool fit; actual swap fees are dynamic.

competitive farming

Tighter bins and more focused shapes earn more swap fees per dollar deployed while price stays in your bins. LP incentives can layer on top to reward productive liquidity.

liquidity shapes

A liquidity shape is how capital is distributed across bins in your price range. Wick supports four deployment modes.

Spot

Uniform liquidity across every bin in the price range, with optional emphasis around the active bin for tighter spot exposure. Versatile and straightforward, and the closest preset to a wide passive position. Good default when you want lower rebalancing frequency.

Curve

Bell-curve distribution centered on the active bin. Maximizes capital efficiency near spot while tapering toward the edges of the price range. Best for stables and pools that stay near peg.

Bid-Ask

Inverse curve: capital weighted toward both ends of the price range. Captures larger volatility swings away from spot. Can deploy single-sided for DCA in or out strategies.

Paint

Paint is a Wick-only feature, not a generic DLMM preset. While Spot, Curve, and Bid-Ask cover common deployment patterns, real strategies often need asymmetric ladders, stepped DCA bands, or custom volatility assumptions that no preset can express.

In Paint mode you draw any free-form line across the bin chart. On release, Wick snaps your stroke into discrete bin heights and deploys liquidity to match the curve. The same price range, fee tier, and autocompounding behavior apply as with presets; only the distribution is custom.

Use Paint when you want fine-grained control: laddered entries above or below spot, a fat tail on one side of the price range, or a hand-tuned mix of spot and bid-ask behavior in a single position. You can redraw before confirming deployment to iterate on the shape without leaving the LP flow.

hooks

hooks are optional contracts on a wAMM pool that run custom logic on swaps and liquidity updates. Wick uses them for limit orders and options, built directly on top of normal bin liquidity.

limit orders

On wAMM, when adding liquidity you choose which bins fill. Each bin is an order at its own price; swaps can fill a bin fully or partially, like an orderbook.

Price can reverse through the same bins. Per bin, you choose whether filled amounts stay locked:

• Fill — any filled amount locks and becomes claimable, including partials. A reversal cannot trade that fraction back. Whatever is still unfilled stays live and can keep filling.
• Normal — the bin stays live as regular liquidity. A reversal trades filled tokens back into the token you deposited, undoing the fill.

Claim filled amounts per bin or all at once. You pay the claim gas, not the swapper, so swaps stay efficient. Wick arbitrage keeps the pool at market, so resting bins fill as price moves.

One position can express a whole strategy:

options

Wick also uses hooks for wAMM options anchored at a strike. You deploy liquidity in a liquidity shape around the strike (downside wing, upside wing, concentration at the strike), and the hook settles the position against a programmed rule when your exit condition is met, similar to limit orders above.

Calls and puts, on bins. A liquidity shape plus hook rules settles against where price finishes; there is no separate options book.

• Call-like: you earn swap fees while spot trades through your bins; at settlement, you benefit if spot finishes above the strike.
• Put-like: the mirror layout; you benefit if spot finishes below the strike.

Unlike a traditional option, the position can earn swap fees while it waits. There is no separate options chain. Intermediate bin crossings still incur path cost (the same repricing cost as LVR), but hook settlement fixes payoff from the endpoint versus the strike, not from the path. See wAMM options intuition.

full range

Wick also ships full-range V2-style pairs alongside DLMM pools for LPs who prefer passive, set-and-forget management.

pair types

Wick features two pair types:

• Volatile (Uni V2): equal dollar-weighted tokens using x * y = k.
• Stable (Correlated): optimized for pegged or correlated assets using xy(x² + y²) = k, with minimal slippage near parity.

dynamic fees

Wick replaces static fee tiers with a dynamic fee algorithm that adjusts in real time based on market conditions. LPs are protected during volatile periods; traders get better execution when markets are calm.

The cost of providing liquidity is not constant. It rises when markets move quickly, toxic flow is more likely, and LPs face more adverse selection. It falls when conditions are calm and flow is mostly organic. Fees should reflect the cost of providing liquidity. On wAMM pools, fees compound automatically into positions, with the fee level set by fee-to-volatility targeting.

how it works

fee-volatility mismatch

LP risk moves with the market. A static fee line can't follow it; a dynamic fee can.

Static fee tiers charge the same rate whether the market is crashing or trading sideways. The result is a fee-volatility mismatch in both directions: LPs are underpaid when risk is high and traders are overcharged when it isn't.

Wick's algorithm tracks volatility live and closes this gap continuously.

Wick vs static fee

Wick monitors DEX and CEX feeds to price risk before arbitrage arrives, adjusting fees continuously. Residual spread the fee barrier does not catch is recovered through Wick arbitrage at 0% internal pool fee.

The chart below compares Wick against fixed 0.30% and 1.00% tiers over 24 hours. Fees compress during calm windows and spike when volatility hits:

fee response

The comparison above is a daily snapshot. In practice, Wick adjusts continuously, widening the no-arb band as volatility rises and narrowing it as conditions stabilize. Spike and decay speed is tuned per pool category.

market response

When volatility spikes, fees ramp to protect LPs from toxic flow, reclaiming 86–95% of the value that would otherwise be extracted; when markets are calm, fees compress to stay competitive and capture organic volume.

predictive, not just reactive

Wick uses a predictive fee model: unlike systems that only react to internal pool metrics, Wick monitors external CEX and DEX feeds (prices, cross-venue volume, on-chain signals) and runs adjustments as frequently as every second. When a CEX move signals the pool is about to become a target, fees are already elevated by the time toxic flow hits.

On wAMM pools, fees also adjust reactively when swaps cross bins, stacking on top of the predictive layer.

Higher fees shift who gets paid when prices move, not whether arbitrage happens: a larger slice comes back to the LP as fee revenue, a smaller slice stays with the arbitrageur. That is why Wick talks about "recapture" rather than "reduction". The share-not-total result is worked through on the concepts page.

Wick targets a fee-to-volatility ratio of roughly 10:1: the swap fee is about ten times the typical per-block price move, so LPs recover most of what would otherwise leak to arbitrageurs.

fee ranges

Every pool operates between two bounds: a base fee floor and a fee cap. The floor scales with the pool's bin step, and the cap is set per pool category, so a tight stablecoin pool and a volatile token pool run very different ranges. The algorithm moves continuously between its pool's bounds based on real-time signals, combining the floor with the volatility surcharge.

Wick tunes spike and decay behavior per pool category:

volatile pools

Pools like LIT/USDC or BTC/USDC experience sharp, frequent price movements. The algorithm uses aggressive scaling: fees ramp up quickly at the first sign of volatility and decay at a controlled rate to avoid premature relaxation.

stable pools

Stablecoin pools (USDC/USDT, DAI/USDC) trade in tight ranges with rare depegs. The algorithm uses tight ranges around the base fee, only spiking during genuine depeg events. This keeps fees low during normal operation, making Wick competitive for stablecoin routing.

LST pools (wLIT/LIT) share the same low-fee baseline during normal exchange-rate accrual. When redemption carries a known cost (a flat fee, a cooldown window, etc.), the pool fee matches that economics so swapping is not the cheaper exit. Without that alignment, holders drain LP instead of redeeming. Genuine volatility (liquidity stress, depeg risk) still triggers a fee spike; toggle to LST on the chart to see redeem-cost matching vs a real vol event.

LP protection

An LP position leaks value when the pool is slow to reprice against external markets. Arbitrageurs buy the underpriced side, sell the overpriced side, and keep the spread. Wick cannot remove the directional risk of a two-sided LP position, but dynamic fees reduce how much value leaks to arbitrageurs when prices move.

Each arbitrage event splits into fee revenue for LPs and profit kept by the arbitrageur. The dynamic fee algorithm is tuned to keep that split as favorable as possible, reclaiming 86–95% of that value during normal trading when volatility is priced correctly.

Dynamic fees are the first line of defense. The value lost past the fee barrier is recovered by Wick arbitrage. For the formal split and fee-to-volatility math, see fee-arb decomposition and recapture, not reduction.

Discrete bin pricing on wAMM pools also returns more of each move to LPs as fees.