Danogo Clmm

Danogo Concentrated-Liquidity Stablecoin DEX

Swap between Cardano stablecoins (USDA, DJED, iUSD, USDCx, USDM) using Danogo's on-chain CL pools.

Prerequisites

• Ogmios endpoint for UTxO queries (e.g., http://localhost:1337)
• Cardano submit-api or MCP for transaction submission
• Payment signing key for executing swaps

How it works

Danogo uses Uniswap V3-style concentrated liquidity on Cardano:

• Pool state lives in UTxOs at a known script address
• Each pool datum contains sqrtPrice, liquidity, currentTick, feeRate
• Price = sqrtPrice^2 (the datum stores the square root, not the price itself)
• Swaps consume the pool UTxO and produce a new one with updated state

Scripts

Safety rules

1. Always query fresh pool state before building a swap. Pool UTxOs change after every transaction — using a stale outRef causes "UTxO not found" errors.
2. Do NOT double-sqrt: The datum stores sqrtPrice. Square it to get the price ratio. Do not apply Math.sqrt() — that was a known SDK bug.
3. Slippage: Use 0.5-1% for stablecoin pairs. Tighter than typical DEX swaps because stablecoins have low volatility.
4. Minimum swap: Each pool has a minSwap field in the datum. Swaps below this amount fail validation.
5. Confirm network (mainnet vs preprod) before querying — pool addresses differ.

Swap flow

1. Query pool UTxO via Ogmios (queryLedgerState/utxo at pool script address)
2. Decode CBOR datum → extract sqrtPrice, liquidity, feeRate
3. Calculate: price = sqrtPrice^2, outputAmount = inputAmount * price * (1 - fee)
4. Build swap transaction with pool UTxO as input + swap redeemer
5. Sign and submit

Known stablecoin pairs (mainnet)

Liquidity provision

1. Choose a tick range (price band) for concentrated liquidity
2. Calculate token amounts needed for the chosen range
3. Build add-liquidity transaction → receive LP NFT
4. Earn trading fees proportional to your share of active liquidity
5. Remove liquidity by burning the LP NFT

Troubleshooting