Monopoly Auto Market Maker System : primary maket for TiTi mint and redeem
Monopoly automatic market maker, (hereinafter referred to as “M-AMM” or TiTi's AMM), plays an important role in TiTi Protocol because compared with the mortgage, casting, or auction, users have the most precise understanding of the transaction process and principles. It is the core mechanism for adjusting the TiUSD circulation, which makes a primary TiUSD market through specific trading strategies to maintain stability. Users can exchange their assets for another kind of asset they need at the agreed price. In the process of exchange, users only care about two factors, price and trading slippage. In this way, protocol complexity embodies in indicators that are easy for them to understand. The protocol makes it very easy for users to understand how the protocol effectively adjust the two factors, thus gaining trust, which dramatically reduces the user's education costs and avoids unnecessary market panics.
Therefore, TiTi Protocol can be seen as a M-AMM that adjusts the TiUSD market circulation actively and effectively. The M-AMM always provides users with bilateral orders for TiUSD bid & ask at $1. When there are more buying demands, TiUSD price will push up. It means that the market's demand for TiUSD has increased. In response, the protocol will mint more TiUSD tokens into the market，increasing ask orders. In contrast, when there are more sell demands, TiUSD price will fall down, it means that the market demand for TiUSD is reducing. As a result, the protocol will use the funds accumulated during the previous TiUSD issuance to enhance TiUSD bid & ask depth. Based on this assumption, the following architecture was designed to ensure sufficient funds to repurchase TiUSD at any time, and the market circulation always reflects the genuine demands of users. At the same time, TiUSD's inflation and deflation will not affect the value of TiUSD in circulation. In TiTi Protocol, the process of updating each round of bid & ask is called the ReOrders mechanism.