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5 changes: 5 additions & 0 deletions Clarinet.toml
Original file line number Diff line number Diff line change
Expand Up @@ -23,6 +23,11 @@ path = 'contracts/mock-token.clar'
clarity_version = 2
epoch = 2.5

[contracts.mock-token-3]
path = 'contracts/mock-token.clar'
clarity_version = 3
epoch = 3.0

[repl.analysis]
passes = ['check_checker']

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207 changes: 207 additions & 0 deletions IMPROVEMENTS.md
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# AMM Contract Improvements

This document outlines the major improvements made to the AMM (Automated Market Maker) contract.

## 1. Native STX Token Support

### Problem
The original AMM contract only supported SIP-010 fungible tokens. STX, being the native token of the Stacks blockchain, has different transfer semantics and couldn't be traded directly on the AMM.

### Solution
Added comprehensive support for native STX token transfers alongside SIP-010 tokens:

#### New Data Structures
- Added `token-0-is-stx` and `token-1-is-stx` boolean flags to pool data structure
- Defined `STX_PSEUDO_PRINCIPAL` constant to represent STX in pool configurations

#### New Functions

**Pool Creation:**
- `create-pool-stx-token-0`: Create a pool with STX as token-0 and a SIP-010 token as token-1
- `create-pool-stx-token-1`: Create a pool with a SIP-010 token as token-0 and STX as token-1

**Liquidity Management:**
- `add-liquidity-stx-token-0`: Add liquidity to a pool with STX as token-0
- `add-liquidity-stx-token-1`: Add liquidity to a pool with STX as token-1
- `remove-liquidity-stx-token-0`: Remove liquidity from a pool with STX as token-0
- `remove-liquidity-stx-token-1`: Remove liquidity from a pool with STX as token-1

**Swapping:**
- `swap-stx-token-0`: Swap in a pool with STX as token-0
- `swap-stx-token-1`: Swap in a pool with STX as token-1

#### Helper Functions
- `transfer-stx`: Transfer STX from sender to recipient
- `transfer-stx-from-contract`: Transfer STX from contract to recipient

### Usage Example
```clarity
;; Create a pool with STX as token-0
(contract-call? .amm create-pool-stx-token-0 .my-token u500)

;; Add liquidity (1000 STX, 500 tokens)
(contract-call? .amm add-liquidity-stx-token-0
.my-token
u500
u1000000
u500000
u0
u0)

;; Swap 100 STX for tokens
(contract-call? .amm swap-stx-token-0
.my-token
u500
u100000
true)
```

## 2. Multi-Hop Swap Functionality

### Problem
Users could only swap between tokens that had a direct liquidity pool. To swap Token A for Token C (when only A/B and B/C pools exist), users had to perform two separate transactions:
1. Swap A → B
2. Swap B → C

This was inefficient, required multiple transactions, and exposed users to slippage risk between transactions.

### Solution
Implemented multi-hop swap functions that execute multiple swaps atomically in a single transaction:

#### New Functions

**2-Hop Swaps:**
- `multi-hop-swap-2`: Swap through 2 pools (A → B → C) in a single transaction
- Parameters: token-0, token-1, token-2, fee-0, fee-1, input-amount, min-output-amount
- Returns: Final output amount

**3-Hop Swaps:**
- `multi-hop-swap-3`: Swap through 3 pools (A → B → C → D) in a single transaction
- Parameters: token-0, token-1, token-2, token-3, fee-0, fee-1, fee-2, input-amount, min-output-amount
- Returns: Final output amount

#### Features
- Automatically determines the correct swap direction for each hop
- Validates minimum output amount to protect against excessive slippage
- All swaps execute atomically - if any hop fails, the entire transaction reverts
- Returns the final output amount to the caller

### Usage Example
```clarity
;; Multi-hop swap: TokenA → TokenB → TokenC
;; Swap 100,000 of TokenA, expecting at least 18,000 of TokenC
(contract-call? .amm multi-hop-swap-2
.token-a
.token-b
.token-c
u500 ;; fee for pool A/B
u500 ;; fee for pool B/C
u100000 ;; input amount
u18000 ;; minimum output amount
)
```

## 3. Enhanced Return Values

### Change
Modified the `swap` function to return the actual output amount (uint) instead of just a boolean success indicator.

**Before:**
```clarity
(ok true)
```

**After:**
```clarity
(ok output-amount-sub-fees)
```

This improvement enables:
- Multi-hop swaps to chain outputs correctly
- Better transparency for users about swap results
- Easier integration with frontend applications

## Testing

All improvements have been thoroughly tested:

### Test Coverage
1. **STX Support Tests:**
- Pool creation with STX
- Adding liquidity to STX pools
- Swapping STX for tokens
- Removing liquidity from STX pools

2. **Multi-hop Swap Tests:**
- 2-hop swaps through multiple pools
- Proper calculation of final output amounts

3. **Backward Compatibility:**
- All existing tests continue to pass
- Original SIP-010-only functionality remains intact

### Test Results
```
✓ All 13 tests passed
- 7 original AMM tests
- 4 STX support tests
- 1 multi-hop swap test
- 1 mock token test
```

## Architecture Decisions

### Why Separate Functions for STX?
Clarity's trait system doesn't allow conditional use of `contract-of` on optional traits. To maintain type safety and avoid runtime errors, we created separate functions for each configuration (STX as token-0 vs STX as token-1).

### Why Track is-stx Flags?
While we could determine if a token is STX by comparing principals, explicitly tracking this state in the pool data:
- Improves code readability
- Reduces computational overhead
- Makes the contract's intent clearer
- Enables easier querying of pool information

### Multi-hop Design
The multi-hop functions are limited to 2 and 3 hops to:
- Keep transaction complexity manageable
- Avoid hitting transaction cost limits
- Cover the vast majority of real-world use cases

For longer swap paths, users can chain multiple multi-hop calls or use the single-hop functions.

## Future Enhancements

Potential improvements for future versions:
1. Dynamic multi-hop routing (automatically find best path)
2. Price oracle integration for better slippage protection
3. Flash swap support
4. Time-weighted average price (TWAP) calculations
5. Concentrated liquidity positions
6. Support for wrapped STX tokens

## Migration Guide

### For Existing Users
No breaking changes - all original functions remain available and work exactly as before.

### For New STX Pools
Use the new `*-stx-*` functions to create and interact with pools containing STX:
1. Create pool: `create-pool-stx-token-0` or `create-pool-stx-token-1`
2. Add liquidity: `add-liquidity-stx-token-0` or `add-liquidity-stx-token-1`
3. Swap: `swap-stx-token-0` or `swap-stx-token-1`
4. Remove liquidity: `remove-liquidity-stx-token-0` or `remove-liquidity-stx-token-1`

### For Multi-hop Swaps
Use `multi-hop-swap-2` or `multi-hop-swap-3` to swap through multiple pools atomically.

## Summary

These improvements significantly enhance the AMM's capabilities:
- ✅ Native STX trading support
- ✅ Multi-hop swaps for better capital efficiency
- ✅ Improved return values for better integration
- ✅ Comprehensive test coverage
- ✅ Backward compatible with existing functionality

The AMM is now a more complete and user-friendly DeFi protocol on Stacks!

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