> For the complete documentation index, see [llms.txt](https://seacows.gitbook.io/seacows-amm-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://seacows.gitbook.io/seacows-amm-docs/seacows-nft-amm-protocol/algorithms-and-models.md).

# Algorithms and Models

Seacows AMM utilizes an x\*y=k algorithm model based on Uniswap V2's design principles, with specific optimizations for NFT transactions. A notable feature is the integerization of NFTs, meaning that whether users are trading NFTs, or adding or removing NFT liquidity in the pool, NFTs are processed in whole numbers.

This algorithm enhances the efficiency and fairness of NFT transactions while ensuring continuity and liquidity in the exchange process. On the Seacows AMM platform, each NFT and ERC-20 token swap pool uses this model to dynamically calculate the price of NFTs. This calculation takes into account the current supply of ERC-20 tokens and NFTs in the pool, as well as market dynamics, ensuring that the prices of NFTs reflect changes in supply and demand in real time. As a result, NFT prices are automatically adjusted with each transaction, maintaining timely price updates and sensitive market responsiveness.

The dynamic pricing mechanism provides a more flexible and transparent market environment for NFT trading. Users can rely on the price mechanisms on the Seacows AMM platform, ensuring that their trades are based on the latest market information.\
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