How SaucerSwap works

SaucerSwap is a decentralized exchange on the Hedera network. It combines three trading venues — the V1 constant-product AMM, the V2 concentrated-liquidity AMM, and the V3 order book — with a shared token economy built around SAUCE. Every venue feeds protocol fees into SAUCE buybacks, and the SaucerSwap DAO steers how emissions and treasury flows are allocated.

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Tokens on Hedera

Every asset on SaucerSwap is a Hedera Token Service (HTS) token. HBAR itself is not an HTS token, so the protocol wraps it into WHBAR behind the scenes; you always see plain HBAR in the interface. Before your account can hold a new token, Hedera requires a one-time token association, which the web app prompts for automatically.

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Three trading venues

When you swap in the web app, routing compares available V1 and V2 paths and quotes the trade for you. On the separate trade page, V3 orders can opt into AMM-backed settlement. The swap router does not currently compare AMM quotes with order-book quotes.

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Fees and buybacks

Traders pay a fee on every trade: a percentage of each AMM swap, or a taker fee on order-book fills. Most of each AMM fee goes to liquidity providers, while protocol fee-switch revenue and net V3 fees fund SAUCE buybacks through BrewSaucer. The ratified economic destinations differ by revenue source; see V3 fees and rebates and SAUCE tokenomics for the allocation matrix.

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Liquidity incentives

The Masterchef contract mints SAUCE on a fixed schedule and distributes it as liquidity incentives:

• V1 yield farm — LP token stakers earn SAUCE (and, when enabled, HBAR) according to farm weights set by governance.
• V2 LARI — the Liquidity-Aligned Reward Initiative rewards V2 positions automatically each two-week epoch, weighted by in-range liquidity. See LARI weights.

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Single-sided staking

Staking SAUCE in the Infinity Pool issues xSAUCE, a receipt token whose SAUCE conversion rate rises over time as fee revenue, emissions, and HBAR staking rewards compound into the pool. xSAUCE also carries voting power and unlocks V3 fee discounts. See Single-sided staking.

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Governance

SAUCE and xSAUCE holders govern the protocol through token-weighted, on-chain voting: proposals start as a Request for Comment on the governance forum, then advance through Proposal and Election votes on the web app’s govern page. The DAO controls farm weights, LARI campaigns, pool creation, tokenomics changes, and treasury flows. See Governance.

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