In this video, we'll explain the new decentralized exchange, automated market maker, liquidity pool, and token management features available in the Pi wallet, explaining what each does, how they're connected, and how they appear in the app. All the features discussed today are in Testnet, which introduces the pioneers of decentralized finance through a safe, gradual, and educational journey of discovery. Start by opening the Pi Testnet wallet and selecting the Tokens tab. This is your main hub for all token related functions. At the top, you will see four options. Swap, Exchange, Liquidity Pools, and Manage. If your wallet does not yet have tokens, it will display No Tokens. Tap Add Tokens or Manage to open the Manage Tokens page. This is where you enable the token to be visible and usable in your wallet. Each token displays the name, icon, and address of its issuer, such as PizzaToken, Archimedes, or ShrimpSwap. Activate the token to ensure that it will be active for swaps, exchanges, and liquidity pools. This requires transaction fees, in this case using TestPi. Next, let's explore Swap. Automated market makers, or AMMs, drive swaps and liquidity pools. Instead of matching buyers and sellers like traditional exchanges, automated market makers use formulas to automatically adjust prices based on the balance of tokens in each pool. This design allows trading to take place continuously and instantly, even without a centralized order book or intermediary. In the swap interface, you will see two fields. Sell is where you select the token and amount you want to trade. Buy is where you select the tokens you want to receive. In this example, I exchanged Test Pie for Pizza Token. My TestPi balance appeared at the top, and the app automatically calculated how many other tokens I would receive in return. You can adjust your slippage tolerance. Here it is set to plus or minus 1%, which limits how much the price can move before the swap is cancelled. Once everything looks correct, tap Review to confirm the accuracy of the transaction summary. Note that there is a countdown that shows how long the quoted rate remains in effect. If everything looks good, tap Confirm Swap. After a successful swap, you will be returned to the Tokens tab, where your new token balance is updated. Next, open Exchange to see all the trading pairs available on the testnet. And Exchange is where token trading pairs are listed, each pair representing two tokens that can be traded against each other using an on-chain order book. This screen serves as a directory of available markets, showing which token pairs currently exist and have active liquidity. DEXs, or decentralized exchanges, allow users to trade tokens directly with each other without a central authority or intermediary. Trading is done through on-chain mechanisms such as order books or liquidity pools, whichever provides the best results determined automatically by the network. If the desired pair is not listed, you can create it manually via the create trading pair screen by selecting two tokens to define a new market. Creating trading pairs simply defines that market. This tells the DEX that both tokens can be traded. To make the pair truly tradable, liquidity is also required, which can be added on the liquidity pools page. Now let's explore liquidity pools. Each pool represents a pair of tokens locked together in an on-chain pool, forming the basis of an automated market maker. When you open a pool, you will see details about total liquidity, the liquidity you provided, if any, and the total balance of each token. From here, you can deposit tokens to add liquidity or withdraw tokens you previously added. Depositing adds your tokens to the pool and earns you trading fees proportional to the 0.3% base fee. Withdrawing removes your liquidity and returns your contributed tokens, adjusted to the current pool ratio. You can also create your own liquidity pool if a trading pair does not already exist by selecting two tokens and determining a ratio. These tools form the basis of decentralized trading in the Pi ecosystem, all currently running securely on the Testnet for testing, education, and development prior to mainnet launch. It's also worth noting that developers can create test tokens on Testnet. More details will come soon.
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