Liquidity Pools
DotSwap enables native liquidity provisioning for Bitcoin-based assets, including BTC, Runes and BRC20 tokens. To support decentralized trading and permissionless liquidity, DotSwap offers two distinct liquidity pool models:
DotSwap LP Pools — Custodial, CPMM-based pools secured via multi-signature infrastructure.
Nexus LP Pools — Self-custodial, CLMM-based pools operated through the Nexus Coordination Layer.
This dual architecture ensures accessibility for everyday users while offering deep flexibility and composability for developers and advanced liquidity providers.
1. DotSwap LP Pools (Custodial, CPMM-Based)
DotSwap LP Pools allow users to provide liquidity directly on DotSwap using BTC and a supported token such as BRC20 or Runes. These pools use the Constant Product Market Maker (CPMM) model and are secured by DotSwap’s upgraded multi-signature architecture.
Powered by MMM (Multi-layer Multi-signature Matrix)
Through a strategic integration with Safeheron, DotSwap pools now leverage MMM: a multi-tiered multi-signature matrix combining MPC (Multi-Party Computation) with native Bitcoin multi-signature capabilities.
Key Features:
Enhanced Custody: Pooled funds are protected by a hybrid MPC + Bitcoin multi-sig structure.
Zero Single Point of Failure: All movements require co-signing logic distributed across multiple trusted parties.
Backed by Audited Infrastructure: Strategic collaboration with Safeheron and Slowmist ensures industry-leading operational security.
Supports BRC20 / Runes: Seamlessly integrates UTXO assets in a secure liquidity layer.
2. Nexus LP Pools (Self-Custodial, CLMM-Based)
Nexus LP Pools enable advanced users and protocols to deploy self-hosted liquidity under their own custody. These pools operate under the Concentrated Liquidity Market Maker (CLMM) model, allowing liquidity to be allocated within specific price ranges.
Powered by DotSwap Nexus
DotSwap Nexus is a developer-focused module that integrates BTC-native liquidity logic into any project. Liquidity providers configure swap rules, fees, and asset support while maintaining full asset control.
Key Features:
Full Custody: Assets remain in multisig wallets owned by the LP.
Customizable Parameters: Set custom price ranges, fee tiers, and execution strategies.
Modular & Composable: Suitable for integrations into dApps, wallets, or protocol-side order routers.
CLMM Engine: Efficient use of capital by concentrating liquidity within active trading ranges.
How it Works:
LP hosts a Nexus node and defines pool configuration.
DotSwap frontend routes user trades to available Nexus liquidity.
A signed Bitcoin transaction is co-executed between user and LP.
Comparison
Custody Model
Managed by DotSwap multi-sig (MMM)
Fully self-custodial
Signature Architecture
MPC + native multi-sig
Native multi-sig
Technical Requirements
None
Requires self-hosted Nexus node
Market Making Model
CPMM (CLMM may be supported in future)
CLMM (CPMM is a special case of CLMM)
Fee Control
Set by first liquidity provider
Fully customizable
Security Audits
Safeheron + Slowmist
Operator-dependent
Use of Virtual Tokens
No virtual liquidity tokens
Yes (except at full-range where = 0)
Ideal for
General users with no server setup required
Developers or LPs with high capital share
Incentives and Rewards
All LPs on DotSwap are eligible to receive:
A share of swap fees proportional to their liquidity contribution.
LP points (DotSwap reward credi ts) based on LP activity.
Bonus incentives for early participation and underserved token pairs.
Conclusion
DotSwap’s liquidity layer is designed for both usability and extensibility. DotSwap LP Pools make it easy for any user to provide liquidity safely using multi-signature protection. For more advanced needs, Nexus LP Pools provide flexible, self-custodial liquidity provisioning with full control over market-making strategy. Together, they form the backbone of DotSwap’s native, non-custodial DEX infrastructure on Bitcoin.
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