🦄 Uniswap V2 Mini Exchange (Simplified)

This project is a minimal AMM (Automated Market Maker), inspired by Uniswap V2. It supports adding liquidity, quoting prices, and swapping ETH ↔ Token.

Deploy address https://sepolia.etherscan.io/address/0x4e6037b6613dba5aba761e3b14c7954f114947b7

Structure

• src/UniswapV2.sol: Main contract implementing the AMM logic
• lib/openzeppelin-contracts/: ERC20 standard contract dependency
• test/: Test scripts and cases
• script/: Deployment scripts

Main Contract Flow

Core invariant:

x * y = k

• x = ETH reserve
• y = Token reserve
• k = Constant (liquidity invariant)

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🔑 Core Components

1. Storage

IERC20 public immutable token;
uint256 public reserveEth;
uint256 public reserveToken;

• token: ERC20 token contract
• reserveEth: ETH liquidity stored
• reserveToken: Token liquidity stored

👉 These reserves are always synced with the actual contract balances.

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2. Add Liquidity

function addLiquidity(uint256 tokenAmount) external payable

• User sends ETH + Tokens
• Both are deposited into the pool
• Internal reserves are updated via _sync()

📌 Check: Zero liquidity is rejected.

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3. Quote Function (Pricing Formula)

function quote(uint256 amountIn, bool ethToToken)

Formula (with 0.3% fee):

amountOut = (amountIn * 997 * reserveOut)
          / (reserveIn * 1000 + amountIn * 997)

• Preserves x * y = k
• Larger trades = higher slippage

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4. Swap ETH → Token

function swapEthForToken() external payable

Steps:

1. User sends ETH (msg.value)
2. Contract calculates tokenOut = quote(ethIn, true)
3. Transfer Tokens to user
4. Sync reserves

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5. Swap Token → ETH

function swapTokenForEth(uint256 tokenIn) external

Steps:

1. User sends Tokens via transferFrom
2. Contract calculates ETH out using quote
3. Contract sends ETH (.call{value: ethOut})
4. Sync reserves

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📊 AMM Curve

The constant product formula produces a hyperbolic curve:

• Adding ETH decreases available Token (and vice versa)
• Prevents draining the pool completely
• Defines price slippage

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🧪 Unit Tests

Covered cases:

• ✅ Add liquidity success & revert on zero input
• ✅ Quote matches Uniswap V2 formula
• ✅ Swap ETH→Token & Token→ETH
• ✅ Reverts on insufficient liquidity

Run tests:

forge test -vv

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🚀 Deployment

Deploy on Sepolia testnet:

forge script script/Deploy.s.sol:DeployExchange \
  --rpc-url $SEPOLIA_RPC \
  --broadcast

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📌 Takeaways

• Simple AMM = no order book, only liquidity pool
• Core invariant = x * y = k
• Prices adjust automatically → slippage is inevitable
• Liquidity providers earn fees from swaps

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References

• Uniswap V2 Whitepaper
• OpenZeppelin Contracts