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Creating Standard Pools

This guide explains how to create a new standard liquidity pool (xyk model) on OroSwap. The factory contract allows any user to create pools permissionlessly, provided they follow the required asset and configuration guidelines.

Prerequisites​

To create a standard pool on OroSwap testnet, the following conditions must be met:

1. Token Requirements​

  • You need two native tokens on ZIGChain.
  • Quote Token: Must be one of the supported quote assets (ZIG or ORO)—these are set by the protocol for stability.
  • Base Token: Can be a native ZIGChain token created by the user via:
    • CLI: Using zigchaind tx bank to create and mint a token.
    • 3rd-party token creation UIs on ZIGChain (community projects).

Step-by-Step: Creating a Pool​

Step 1: Ensure Token Availability​

Make sure you control the wallets holding both tokens, and that they have sufficient balances to provide initial liquidity. The base token must already exist on-chain before proceeding.

Step 2: Select Token Pair​

Choose a valid pair where:

  • One token is ZIG or ORO (quote)
  • The other is your base token

Example: MYTOKEN / ORO

Step 3: Set Initial Price​

Set an initial price ratio between the two tokens. This determines the starting market price in the pool. For instance, if you want:

1 MYTOKEN = 100 ORO

You must provide liquidity in the ratio 1 MYTOKEN : 100 ORO.

Step 4: Add Initial Liquidity​

When creating the pool, you'll be asked to deposit both tokens in the exact ratio matching your initial price. This ensures the x * y = k invariant is respected from the beginning.

Note: Failing to maintain the correct ratio may result in slippage or rejection of the transaction.

Technical Details​

  • Pools are created via the create_pair message on the OroSwap Factory contract.
  • The pair_type must be xyk, which is the only supported type currently.
  • The pool instantiation will automatically:
    • Deploy a new pair contract with swap and liquidity functions
    • Register the pair in the factory for future queries
    • Mint LP tokens to your address representing your liquidity position

Next Steps​

Once the pool is created:

  • Users can start swapping tokens using the pool
  • Other LPs can join by providing assets in the same token ratio
  • You can monitor the pool via the OroSwap frontend or CLI queries

Support for more flexible pool types and quote tokens is coming in future releases.