Market Maker Mechanism
WWW uses a reward-funded, band-based Market Maker designed to keep execution disciplined across Pump.fun stages. The engine continuously manages inventory and exposure via AutoBalance, and enforces a strict excess burn policy when the MM wallet approaches concentration limits.
Execution Fuel: Pump.fun Creator Rewards
The Market Maker is powered by creator reward inflows. Instead of relying on one-time capital injections, the system treats rewards as a renewable execution budget. Those inflows can be deployed to rebalance exposure, maintain structure, and fund ongoing operations over time.
Band-Based Operation (Inventory & Volatility Control)
The MM operates across predefined price bands. Each band represents a different risk regime and inventory target:
When price is weak relative to the band structure, the MM prioritizes inventory recovery and balance restoration using a capped, rule-driven budget.
When price is inside the expected range, the MM minimizes intervention, focuses on maintaining inventory targets, and preserves reserves.
When price is extended relative to the structure, the MM reduces inventory risk to keep exposure bounded and improve long-run sustainability.
The objective is not aggressive intervention—it is variance reduction and inventory discipline: smoothing extremes while keeping the system operational for longer.
Rebalancing Logic (Cadence, Cooldowns, and Targets)
AutoBalance runs on a fixed cadence with guardrails to avoid over-trading:
- Rebalance windows: actions are evaluated periodically (not continuously).
- Cooldowns: after execution, the engine waits before considering another action to reduce churn.
- Inventory targets: the MM maintains a defined target range for token and SOL reserves.
- Budget control: creator rewards define the spending capacity, with reserve preservation as a priority.
In practice: the MM adds liquidity support in weakness (within budget) and reduces inventory risk in strength—keeping holdings and solvency inside strict limits.
Burn Engine: Hard Cap on MM Concentration (3% Rule)
The Market Maker is not meant to become a long-term whale. A strict concentration constraint enforces this:
- Target: keep MM wallet token holdings bounded as a percentage of total supply.
- Threshold: when MM holdings move above 3%, the excess portion is designated for burn.
- Outcome: reduces concentration, increases long-run credibility, and prevents silent accumulation.
Over time, disciplined distribution plus the excess burn policy supports a structural narrative: the engine can operate without evolving into the dominant holder.
What This Improves (Growth Through Structure)
- Longer operational runway: reward-funded execution keeps the system alive beyond initial hype.
- Cleaner chart behavior: band-based rebalancing reduces extremes and improves stability.
- More transparent mechanics: clear rules, on-chain proof, and predictable constraints.
- Burn-driven credibility: excess inventory is removed rather than accumulated.
Transparency & Reporting (On-Chain Proof)
The system is designed to be auditable. Key metrics can be published as the project matures:
MM wallet holdings as a % of total supply.
TXIDs and amounts burned when thresholds are exceeded.
Creator reward receipts used as execution budget.
Time-stamped summaries of band evaluations and actions.