Liq-single-sided-funded-AMM/docs/open-questions.md

Open design questions

Backing and external redemption

• Are special-minted tokens fully fungible with ordinary LiqETH/LiqSOL, including redemption and reward rights?
• How does Liq recognize AMM-controlled assets as backing without double counting assets and token claims?
• When a trader takes LIQ out of the AMM and redeems through Liq, who supplies the native asset and how does the AMM liability change?
• Can Liq draw backing directly from the AMM, or does redemption create a payable? How does either route affect reserves and the AMM curve?
• How are settled claims prevented from being paid or cancelled twice?

Multiple LPs and ownership

• How is a later native-only deposit priced when reserves are imbalanced?
• Does special minting always match the native contribution 1:1, or follow a different rule after initial bootstrap?
• Are liabilities pooled pro rata or tracked per position?
• How do partial exits, share transfers, position splits and additional deposits carry liability and accrued charges?
• Are LP interests fungible tokens or position-specific records?

Yield-support payment

• Is the charge assessed on total special issuance, net circulating exposure or another base?
• Is 2.8% a fixed rate, an example or a dynamic benchmark? APR or compounded APY?
• Do swap fees fund it, and what happens when fees are insufficient?
• Does pool-held LIQ earn rewards? Who receives those rewards, and how are internal flows netted?
• How are accrual, settlement cadence, missed cranks and arrears handled on each chain?

Curve and settlement

• Is the swap invariant ordinary constant product or a specialized native/LIQ curve?
• Is 1:1 conversion a principal accounting rule or an enforceable immediate redemption rate? How are reward indices and losses handled?
• What additional equity/reserve buffer is required beyond E + L >= D?
• How are reserve changes caused by payments and redemption settlement reflected in curve accounting?
• Can withdrawals return both assets, as illustrated, or must native-only exit also be supported?

Chain-specific implementation

• Ethereum: native ETH versus WETH reserve interface; permitted mint/burn and backing-transfer entrypoints; reward/accounting integration.
• Solana: SOL versus wrapped SOL interface; authorized mint PDA, share accounting, transfer-hook accounts, reward treatment and withdrawal-receipt integration.
• Both: atomic mint/liability creation, settlement-before-release, rounding direction, callback/reentrancy behavior and transaction failure rollback.

Next examples to draw and simulate

1. External LIQ redemption while its special-mint liability remains open.
2. A second LP depositing into a 150 ETH / 75 LiqETH pool.
3. Partial withdrawal followed by LP-position transfer.
4. Fees insufficient to meet accrued yield-support payments.
5. Last LP exit with LIQ still circulating outside the pool.