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description: Innovative Liquidity System
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# Liquidity

Based on the AMM model, Copycat Dex has innovatively introduced the PVPAMM mechanism, creating a new system where users can provide liquidity to each other. This system includes the PNL Pool and the CUD bond.

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## **About PVPAMM**

Copycat DEX has adopted the innovative PVPAMM (Peer-to-Peer Automated Market Maker) model to provide a more efficient and precise trading experience. Here are the main advantages of using our PVPAMM model:

### Direct Peer-to-Peer Trading&#x20;

Our PVPAMM model enables buyers and sellers to transact directly with each other, rather than through traditional liquidity pools. This direct trading mechanism improves transaction efficiency and ensures tighter price matching.

### Improved Price Efficiency&#x20;

The PVPAMM model reduces trade slippage, making market prices closer to the spot market prices. This improved price efficiency offers users more favorable trading conditions.

### Efficient Capital Utilization

&#x20;Compared to traditional AMM models, the PVPAMM model uses capital more efficiently as funds are actively used in direct trades rather than passively placed in liquidity pools.

### Reduced Impermanent Loss Risk

By directly matching orders, our PVPAMM model reduces the risk of impermanent loss faced by liquidity providers.

### Suitable for Complex Trades&#x20;

The PVPAMM model is particularly suited for handling complex types of trades, such as derivatives and leverage trading. It allows for more precise price matching and more flexible trading strategies.&#x20;

At the Copycat platform, we are committed to leveraging these advantages of the PVPAMM model to provide users with a more efficient, cost-effective, and enhanced trading environment. We believe that through this innovative trading mechanism, our users will be better able to execute their trading strategies while enjoying industry-leading trading conditions.

