Fira Market AMM

The Fira Market is a specialized AMM for trading Bond Tokens against Fira Wrapped tokens, with time-decaying implied-rate pricing.

Overview

The Fira Market is a BT/FW liquidity pool with a pricing curve specifically designed for fixed-rate instruments. As expiry approaches, BT converges toward FW in value — the AMM's logit-based curve naturally handles this convergence.

Each Fira Market is specific to a single BT and curve configuration (scalarRoot, initialAnchor, lnFeeRateRoot). Markets are deployed via the FiraMarketFactory using CREATE2 for deterministic addresses.

How it works

Adding liquidity

Liquidity providers deposit BT and FW in the correct ratio and receive LP tokens. On the first deposit, MINIMUM_LIQUIDITY (1000 wei) is locked to address(1) to prevent the first-depositor rounding attack. Subsequent deposits mint LP proportional to the limiting token.

Tokens must be transferred to the market before calling mint — the contract does not pull tokens.

Removing liquidity

LP tokens are burned in exchange for proportional BT and FW. LP must be sent to the market before calling burn. This works both pre- and post-expiry.

Swaps

The market supports two swap directions:

• swapExactBtForFw — Sell BT for FW. Uses a flash-callback pattern: the market sends FW first, then verifies BT repayment.

• swapFwForExactBt — Buy BT with FW. Sends BT out first, calls back, and checks FW repayment.

Both swap functions are gated by notExpired — no swaps are allowed after the BT expiry date.

TWAP Oracle

Every state write records a new observation in a ring buffer (if the block timestamp differs from the last). The observe(secondsAgos) function returns cumulative ln(impliedRate) values for time-weighted average price calculations. Anyone can pre-allocate observation slots via increaseObservationsCardinalityNext to support longer TWAP windows.

Key features

• Time-decaying pricing — Logit curve ensures BT converges to FW value as expiry approaches

• Flash-callback swaps — Tokens are sent before verification, enabling atomic multi-step operations

• Built-in TWAP oracle — Ring buffer of implied rate observations for external price feeds

• Reserve fees — A portion of swap fees goes to the protocol treasury

• Immutable markets — Once deployed, market parameters cannot be changed (fee overrides are managed by the factory)

Invariants

• Internal totalBt and totalFw are never affected by direct transfers — skim() sends excess to treasury

• Exchange rate is always >= 1.0 (BT trades at a discount to FW)

• Swaps and mints revert after expiry; burns work at any time

Related contracts

• FiraMarket.sol — AMM contract details

• FiraMarketFactory.sol — Factory contract

• MarketMathCore.sol — Pricing math