AMM

What it is

The SODAX AMM is an internal decentralized exchange operated by SODAX, deployed on the Sonic network.

At its core, it works like a standard DEX. It is currently focused on SODAX-native assets and markets, and exists to create tradeability for assets that would otherwise not be able to plug into the cross-network SODAX system.

Technically, the AMM is a fork of Pancake v4, which itself is based on Uniswap v4. In practice today, the simplest way to think about it is as a v3-style liquidity DEX that SODAX hosts itself.

What it does inside SODAX

Inside SODAX, the AMM provides markets for a limited set of assets, primarily paired against bnUSD, SODAX’s overcollateralized stablecoin.

Unlike most decentralized exchanges, liquidity in the SODAX AMM is not made up of idle tokens. Assets that appear in AMM pools are first supplied to the SODAX Money Market and then represented as yield-bearing positions (aTokens). These yield-bearing aTokens are what the AMM actually trades.

This means the same capital can support lending, execution, and trading at the same time. Liquidity earns interest in the Money Market while remaining available for swaps in the AMM.

From a routing perspective, the Solver treats the SODAX AMM like any other DEX. When executing a cross-network action, it can route through the SODAX AMM if it is the best available venue, just as it would with an external market.

The key difference is ownership. Because SODAX runs this AMM itself, trading fees stay inside the system instead of being paid to third-party liquidity venues.

Why it exists

Some assets that are important to the SODAX system do not naturally have deep or reliable markets elsewhere, especially when they are introduced on new networks.

Without an internal AMM, making these assets usable would require waiting for external liquidity to appear or asking applications to bootstrap and manage their own markets. That is often slow, fragmented, and outside the core focus of most teams.

The SODAX AMM exists to solve this by giving the system a straightforward way to create markets when needed, using liquidity it already controls.

In addition, the AMM allows SODAX to keep this liquidity productive by using yield-bearing assets, rather than locking capital in idle pools solely for trading.

What this means for users and partners

For users, this means certain assets are immediately tradable and usable, even if they are new or not widely supported elsewhere. They do not need to know whether a trade went through the SODAX AMM or another venue. Execution just works.

For partners and builders, the AMM removes the need to set up or maintain liquidity for SODAX-native assets themselves. They can rely on SODAX to provide a functioning market and focus on building their application instead of managing exchange infrastructure.