How It Works
End-to-end overview of the AmmoMarkets protocol.
The Flow
AmmoMarkets connects the physical ammunition market to the blockchain through four user actions:
- Mint — Deposit USDC, then the AmmoMarkets team finalizes the mint in a daily batch and delivers tokens at the oracle price. AmmoMarkets purchases the matching ammunition to maintain full backing.
- Swap — Trade caliber tokens against USDC on a DEX (primarily Pharaoh on Avalanche). Swaps settle instantly and are the primary path in and out. Includes a small protocol tax routed to the treasury.
- Redeem — Burn tokens, provide a shipping address, and the AmmoMarkets team ships physical ammunition. Redemptions are in 1,000-round increments.
- Exit — Sell tokens back to the protocol for USDC at a small spread. Backstop for when the DEX can't give a fair fill.
Mint, redeem, and exit are each two-step flows: you submit the request on-chain, and the AmmoMarkets team finalizes it. If finalization doesn't happen before your deadline, you can cancel and recover your USDC or tokens (self-rescue). On-chain, finalization is gated by a keeper role configured in the manager contract — currently operated by the AmmoMarkets team.
Why mint and exit exist alongside swap: they provide guaranteed liquidity at the oracle price. As long as the oracle is fresh, you can always price a position against real-world ammo prices, not whatever the DEX pool happens to quote.
Price Oracle
Token prices come from a price oracle maintained by keepers. Keepers post fresh prices as the underlying market moves. The protocol rejects mint, redeem, or exit requests if the oracle price is older than 6 hours.
Each caliber has its own price feed.
Physical Backing
Every token in circulation is backed 1:1 by physical ammunition stored in our warehouse. When you mint tokens, AmmoMarkets purchases the corresponding ammunition. When you redeem, ammunition is pulled from the warehouse and shipped to you.
Smart Contracts
The protocol is powered by a set of smart contracts:
- AmmoManager — global config: keepers, treasury, daily caps, denylist.
- CaliberMarket — one per caliber. Handles mint, redeem, and exit flows.
- AmmoToken — ERC-20 token, one per caliber. Applies a small tax on DEX swaps that funds the treasury.
- PriceOracle — on-chain price feed for each caliber.