How It Works

The Flow

AmmoMarkets connects the physical ammunition market to the blockchain through a simple cycle:

1. User deposits stablecoins → the smart contract mints ammunition tokens at the current oracle price.
2. Tokens are freely held → each token represents one physical round of ammunition, stored in a warehouse.
3. User redeems tokens → tokens are burned, and physical ammunition is shipped to the user.

Price Oracle

Token prices are determined by a price oracle that pulls data from AmmoSquared, a leading ammunition pricing service. Prices are updated every 4 hours to reflect real-world market conditions.

Each caliber has its own price feed. When you mint, the oracle price determines how many tokens you receive per dollar deposited. When you redeem, the same oracle determines the USD value of your tokens.

If the oracle price is stale (older than the allowed threshold), minting is temporarily paused until a fresh price update arrives.

Physical Backing

Every token in circulation is backed 1:1 by physical ammunition stored in a secure warehouse facility. When you mint tokens, AmmoMarkets purchases the corresponding ammunition to maintain full backing. When you redeem, ammunition is pulled from the warehouse and shipped to you.

The Role of the Warehouse

The warehouse serves as the custodian of all physical ammunition backing the tokens. It handles:

• Storage — secure, climate-controlled ammunition storage
• Fulfillment — picking, packing, and shipping redeemed orders
• Inventory management — tracking stock levels against on-chain token supply

Smart Contracts

The protocol is powered by a set of smart contracts:

• AmmoManager — the main entry point for minting and redeeming
• CaliberMarket — manages individual caliber markets and token supply
• AmmoToken — ERC-20 tokens, one per caliber/load type
• PriceOracle — on-chain price feed for each caliber