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SaucerSwap V1 is an automated market maker (AMM) based on Uniswap V2 smart contracts, adapted to work with the Hedera Token Service (HTS) through the Hedera Smart Contract Service (HSCS). For technical detail, refer to the V1 whitepaper.
V1 is SaucerSwap’s legacy AMM. For new liquidity positions, SaucerSwap V2 is recommended: it offers concentrated liquidity, higher capital efficiency, and LARI rewards.

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Constant-product formula

The protocol uses a constant product formula, x⋅y=kx \cdot y = k, for automated liquidity provision. xx and yy are the reserves of each token in a liquidity pool, and kk is the product of these reserves. kk remains constant during swaps, so every swap moves the price along a predetermined bonding curve, and the pool always stays balanced. Liquidity in a V1 pool is spread uniformly across the entire price range (0,∞)(0, \infty). That makes V1 pools simple to provide into — deposits are always a 50:50 value split of the two tokens — at the cost of capital efficiency.

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Fees

Traders pay a 30 basis-point (0.30%) fee on each swap. Of this fee, 5/6 is allocated to liquidity providers, and the remaining 1/6 goes to the protocol. The protocol’s share funds SAUCE buybacks, which are distributed between the Infinity Pool and the DAO treasury. The liquidity providers’ share accrues inside the pool, increasing the value of each LP token. The interface displays a 7-day average fees APR: Fees APR=24h volume×(fee×5/6)liquidity×365\text{Fees APR} = \frac{\text{24h volume} \times (\text{fee} \times 5/6)}{\text{liquidity}} \times 365 where fee = 0.30%. Note that the LP token price is not immune to volatility; it moves with the prices of the underlying tokens.
Total APR = fees APR + reward APR, where reward APR is sourced from the yield farm.

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Worked example

Creating a liquidity pool. A liquidity provider creates a new pool for HBAR and USDC. With HBAR trading at roughly 1/10 the price of USDC on secondary markets, they deposit at a ratio reflecting that price: 10,000 HBAR and 1,000 USDC. If the initial price is off, arbitrageurs will correct it at the liquidity provider’s expense.The constant product for this pool:k=x×y=10,000×1,000=10,000,000k = x \times y = 10{,}000 \times 1{,}000 = 10{,}000{,}000Performing a swap. A trader swaps s=100s = 100 HBAR for USDC. After the 0.30% fee, the effective input is:s′=s×(1−0.003)=99.7 HBARs' = s \times (1 - 0.003) = 99.7 \text{ HBAR}The new reserves must satisfy the invariant:(x+s′)×(y−Δy)=k(x + s') \times (y - \Delta y) = kSolving for the output:Δy=1,000−10,000,00010,099.7≈9.9 USDC\Delta y = 1{,}000 - \frac{10{,}000{,}000}{10{,}099.7} \approx 9.9 \text{ USDC}The trader receives about 9.9 USDC for 100 HBAR — slightly less than the spot rate implies, because of price impact. Price impact is the liquidity “cost” of a swap: the exchange rate worsens as reserves adjust to keep kk constant.Initial price=yx=0.1 USDC/HBARFinal price=990.110,100≈0.098 USDC/HBAR\text{Initial price} = \frac{y}{x} = 0.1 \text{ USDC/HBAR} \qquad \text{Final price} = \frac{990.1}{10{,}100} \approx 0.098 \text{ USDC/HBAR}Price impact=0.098−0.10.1×100≈−2%\text{Price impact} = \frac{0.098 - 0.1}{0.1} \times 100 \approx -2\%Fee distribution. The 0.3 HBAR fee from this trade is split: 0.25 HBAR is added to the pool for liquidity providers, and 0.05 HBAR goes to the protocol for SAUCE buybacks.

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Yield farm

Yield farming lets V1 liquidity providers stake their LP tokens in the Masterchef contract to earn rewards. The Masterchef handles LP token staking and unstaking and mints SAUCE according to the pre-set emission schedule described in SAUCE tokenomics. Farms can also distribute HBAR rewards when the DAO allocates them. Rewards are proportional to your share of the total LP tokens staked in a pool, scaled by that pool’s share of overall emissions — its farm weight. The interface shows this as reward APR: Reward APR=w×(ESAUCE+EHBAR)staked liquidity\text{Reward APR} = \frac{w \times (E_{\text{SAUCE}} + E_{\text{HBAR}})}{\text{staked liquidity}} where ww is the farm weight and ESAUCEE_{\text{SAUCE}} and EHBARE_{\text{HBAR}} are the annualized emission rates in dollar terms. Current emission rates and per-farm APRs are displayed live in the web app; farm weights are set through the governance process.

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Next steps

Provide V1 liquidity

Add liquidity to a V1 pool and stake LP tokens in the farm.

Farm weights

See how emissions are split across V1 farms.

SaucerSwap V2

Concentrated liquidity: the recommended venue for new positions.

SAUCE tokenomics

The emission schedule behind farm rewards.