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RivrDEX is an automated market maker (AMM). Instead of matching buyers and sellers through an order book, an AMM uses a mathematical formula to set prices based on the ratio of tokens held in a liquidity pool.

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How an AMM works

Every trading pair on RivrDEX has a liquidity pool — a smart contract holding reserves of two tokens (call them X and Y). The price of each token is determined entirely by how much of each token is in the pool at any moment. When you swap token X for token Y:
  1. You deposit X into the pool.
  2. The pool releases Y to you.
  3. The ratio of X to Y shifts, which changes the price.
No counterparty is required. The contract itself is always the other side of the trade.

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The constant product formula

RivrDEX uses the same formula that Uniswap v2 pioneered, adapted for Vara Network’s WASM runtime: 
# Constant product formula
x * y = k

# After swap of dx for dy:
(x + dx) * (y - dy) = k
dy = y - k / (x + dx)
  • x — reserve of token X in the pool
  • y — reserve of token Y in the pool
  • k — a constant that must hold before and after every trade
  • dx — amount of token X you send in
  • dy — amount of token Y you receive
The product x * y must always equal k. This means the pool can never be fully drained of either token — the price of the scarcer token rises asymptotically as supply falls.

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Price impact

The larger your trade relative to the pool’s total liquidity, the more you shift the token ratio — and the worse your effective price becomes. This is called price impact.
A trade that is 1% of the pool’s reserves will have noticeably worse pricing than a trade that is 0.1%. For large trades, consider splitting your order into smaller chunks.

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Slippage

Between the time you submit a transaction and the time it is executed on-chain, other trades may occur and shift the price. The difference between your expected price and the executed price is slippage. You can set a slippage tolerance in the RivrDEX interface. If the price moves beyond your tolerance before your transaction is included, the swap will revert rather than fill at an unfavorable rate.
For volatile or low-liquidity pairs, increase your slippage tolerance slightly. For stable, deep pools, a tight tolerance (0.1–0.5%) is usually sufficient.

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Price impact vs. slippage

ConceptCauseWhen it happens
Price impactYour trade size relative to pool depthAlways — built into the formula
SlippageOther trades moving the price between submission and executionOnly when the chain is active between your submit and confirmation
Both reduce the amount of token Y you receive. Price impact is predictable and visible before you confirm; slippage is not.

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Comparison to Uniswap v2

RivrDEX’s AMM logic is directly inspired by Uniswap v2. The core formula and pool mechanics are equivalent. The key difference is execution environment: RivrDEX runs on Vara Network using Gear smart contracts compiled to WASM, rather than the EVM. This enables near-gasless transactions and Vara’s actor-model message passing — but the trading math is the same.