LiquidSwap

LiquidSwap is an automated market maker on Aptos, the first AMM to launch on that chain. Its liquidity providers deposit token pairs that the pool rebalances as prices move, leaving the depositor holding more of the token that fell. That impermanent-loss mechanism is why we reject the AMM category for advised money, regardless of how sound the individual exchange is. DefiLlama measured $1.05M across the Aptos and Move accounting perimeter on 2026-08-16. The file reopens only for a product without paired liquidity exposure.

Review triggers: events that reopen the verdict
• Ships a product line without impermanent-loss exposure that merits its own review

Watched nightly: a warning on its venues or files, or a cited document that changes, reopens the memo. The first confirmation is due 2026-11-15.

The research file

Mechanism applicability

LiquidSwap supports uncorrelated constant-product pools and a separate curve for correlated assets. Liquidity providers supply both pool tokens and receive LP tokens representing their share. Stable-asset correlation can reduce price divergence but does not convert the LP claim into guaranteed single-asset principal.

Control and assurance applicability

Swap and treasury fee settings are configurable by a treasury multisig pending DAO control. A Pontem-team MSafe multisig controls an emergency brake that can stop swaps and liquidity minting while leaving LP burns available. Multiple audits and partial formal verification reduce implementation uncertainty but do not remove inventory or chain risk.

Exit applicability

An LP exits by burning LP tokens for the pool reserves then held. The emergency design intends to preserve burns during a pause, but realizable proceeds still depend on reserve composition, token transferability, pool precision, transaction execution and any desired post-withdrawal swap.

Why the dossier still applies

DefiLlama measured $1,052,775 across Aptos and Move accounting on 2026-08-16. Size is not decisive: the product remains paired-liquidity exposure. Reopen only for a separately accounted non-LP product, then document its controls, audit scope, loss allocation and proposed-size stressed exit.

Class rule

The amm lp class is outside the approved structures, so every protocol in it is not approved until the rule changes. The rule is about the structure, not an adverse finding about this protocol, and it is not a client instruction. The events that would reopen it are listed with the memo.

Sources

The claims above trace to these. Where a number could not be independently verified, the thesis says so.

• LiquidSwap Docs — introduction and audits · primary · accessed 2026-08-16
  Supports: Aptos AMM identity, audit record, formal-verification status
• LiquidSwap Docs — protocol overview · primary · accessed 2026-08-16
  Supports: paired deposits, LP tokens, fee controls, emergency brake
• LiquidSwap Docs — smart contracts · primary · accessed 2026-08-16
  Supports: Move contract architecture, router boundary, mainnet release
• LiquidSwap Docs — staking and harvest · primary · accessed 2026-08-16
  Supports: LP incentive layer, permissionless staking pools, reward exit
• LiquidSwap — live application · primary · accessed 2026-08-16
  Supports: current application lifecycle, Aptos deployment, pool interface
• DefiLlama — LiquidSwap survey record · secondary · accessed 2026-08-16
  Supports: $1,052,775 TVL, Aptos and Move accounting, DEX category

Inherited controls

The research above describes the protocol layer. Every position also inherits the asset it holds and the chain it settles on. The layer with the most administrative power sets the position’s effective control; that describes control, not quality or suitability.