Lesson 2.1 - Regular AMM vs DLMM

A standard AMM can be capital inefficient because it spreads liquidity across ALL possible prices — from $0 to infinity. Most of that range never sees a single trade. – It has the advantage of not requiring any maintenance, but you may earn less fees per swap.

• Bitflow’s HODLMM – Concentrated Liquidity Engine – allows the Liquidity Provider (LP) to concentrate their liquidity within a specific price range. You are focusing your liquidity where the trading action is happening, thus earning more fees per swap.

The Problem Is Simple

Regular AMMs:

Like watering an entire football field to grow only a few flowers.

• This inefficiency exists because traditional AMMs spread liquidity across ALL possible prices — from $0 to infinity. Most of that range never sees a single trade.

HODLMM Fixes This

HODLMM: (High-throughput, Orderbook-style, Decentralized Liquidity Market Maker)

• Like using a precision irrigation system that only waters the flowerbeds where you know growth is happening.
• Instead of spreading liquidity everywhere, HODLMM solves this by concentrating liquidity where trades actually happen.
• The result: More yield with less capital, and zero price impact within the active bin