Definition of Pool Types In NFT AMMs

Collection.xyz has three types of pools, TOKEN, NFT and TRADE pools.

TOKEN/NFT are what we call limit-type pools. Once they trade one way, they do not trade the other way. For example, a TOKEN pool may have a bid for an NFT, but after it buys the NFT, it does not sell it again.

This is unlike the two-sided TRADE pool, which will buy and sell within the pool’s liquidity range. You can think of them as price ladders, with the prices parameterized by pool’s bonding curve and liquidity.

The difference between TOKEN and NFT pools are mainly the type of liquidity in the pool. If we think of TOKEN-NFT pair as TOKENs being the bid liquidity, and NFTs as ask liquidity, then TOKEN pools have bid liquidity and NFT pools have ask liquidity