Trading and Settlement
Trading and settlement in Wattlet are powered by an automated, transparent mechanism that connects users directly with real-time liquidity pools. All transactions occur through Wattlet’s built-in AMM (Automated Market Maker), ensuring decentralized, permissionless exchange of energy-denominated assets.
1. Trading Model Wattlet supports trading pairs in the format USDT/KWTXX, where “XX” represents a specific regional KWT (e.g., CN, UK, ES). This means KWT can only be exchanged with USDT, maintaining a stable and predictable reference market. Each region’s KWT operates independently with its own liquidity pool and oracle feed, allowing localized market behavior and transparent price discovery.
2. How AMM Works The AMM algorithm automatically adjusts token ratios in response to trading activity. When users buy KWT with USDT, the pool issues KWT based on the current liquidity curve; when users sell KWT, the pool rebalances by returning USDT according to the same curve. No intermediaries or order books are required — prices are determined entirely by smart contract logic and market demand.
3. Transaction Flow
The user selects a trading pair (e.g., USDT/KWTCN).
Inputs the desired amount of USDT or KWT.
The AMM calculates the current rate and displays the estimated output.
The user confirms the transaction, which is then executed and verified on-chain.
Updated balances and transaction status are reflected in real time within the wallet interface.
4. Fees and Slippage Each trade includes a small transaction fee, distributed to liquidity providers (LPs). Slippage may occur based on pool depth and trade volume; deeper pools result in more stable execution prices. Estimated slippage is displayed before every trade confirmation for transparency.
5. Settlement Process All trades settle directly on-chain in real time. No custodial risk or centralized clearing occurs — users maintain full control of assets before, during, and after the trade. Completed transactions are immutable and recorded within the blockchain ledger and wallet history.
6. Cross-Region Awareness Although users cannot directly trade one KWT variant for another (e.g., KWTUK → KWTCN), price differences between regions create natural arbitrage opportunities through indirect USDT conversions. This allows the Wattlet ecosystem to maintain regional independence while reflecting global market efficiency.
7. Transparency and Verification Every trading pair’s liquidity and pricing data are publicly verifiable. Users can access live pool statistics, transaction volume, and oracle-linked reference prices through the app or blockchain explorer.
The trading and settlement layer of Wattlet ensures that all energy-denominated exchanges remain decentralized, efficient, and consistent with verified real-world data.
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