✨Virtual AMM

The Paradise Virtual AMM is the core engine of the protocol. It is responsible for raising the floor price and providing the protocol's own liquidity to all PARA tokens.

It differs from the traditional AMM model because it does not hold a pool of PARA tokens. Instead, it mints PARA tokens as they are purchased and burns them when they are sold back. The only hard assets it holds are the stablecoins it spent on PARA purchases. These stablecoins are also withdrawn from the pool when PARA is sold.

vAMM does not hold PARA tokens and supports a potentially unlimited supply of PARA. When a PARA is purchased, the liquidity to pay for the PARA enters the pool and the PARA tokens are minted in time to be given to the purchaser. When a PARA is sold back, the PARA token is burned and the liquidity exits the pool.

This timely minting and burning ensures that all PARA tokens are backed by intrinsic value.