A simple introduction to the principle of the 314 protocol:
314 and various public chain tokens form a liquidity pool pair. For example, 314/BNB
The project party adds Genesis liquidity to the contract to determine the price, and the contract starts automatic market making.
The number of 314 in the contract * the number of BNB = K value
The K value is permanently fixed and cannot be changed after the Genesis liquidity is added.
Coin price = BNB/314
Before a buy or sell order is executed, the contract will first perform a calculation to estimate the impact of this transaction on the price
For example:
Genesis liquidity adds 100BNB to 100 314s
K value = 10000, 314 price is 1BNB
When a buy order interaction occurs outside, 5BNB is transferred to the contract address, and the contract makes a prediction
The number of BNB in the contract becomes 105, and the K value remains unchanged, so the number of 314 in the contract should be K value (10000)/105BNBN=95.2380
The contract executes this transaction and obtains 314 quantity of 100-95.2380=4.762
And the price = BNB/314=105/95.2380=1.1025
Therefore, the current 314 price is increased to 1.1025, the transaction is completed, and wait for the next transaction to occur.
