How Does DefiTuna AMM Work?
DefiTuna AMM is a Solana-based DEX featuring concentrated liquidity with native on-chain limit orders and leveraged LP positions up to 5x. With $12M TVL and $3.8B in early trading volume, it offers TUNA token stakers a share of all protocol revenue in SOL. The protocol introduces novel features but is relatively young with limited stress-testing.
TVL
$493,000
Sector
DEX
Risk Grade
C+
Value Grade
C+
Core Mechanisms
4.1.2 Concentrated liquidity (Uniswap v3 style)
NovelFusionAMM — CLMM with native on-chain limit orders, first on Solana to support rule-based entries and exits
Novel integration of limit orders directly into CLMM
6.2.2 Kinked utilization curve (Aave/Compound-style)
NovelLending pools supplying leverage capital for LP positions at up to 3.5x (5x for stablecoins)
Novel combination of concentrated liquidity with leveraged positions
2.1.2 Percentage-based fee
Trading fees from AMM swaps and leveraged position fees
Standard DEX percentage fee model
2.2.1 Direct to stakers / holders
TUNA stakers earn proportional share of all protocol revenue in SOL
Revenue-sharing model with SOL-denominated distributions
3.1.1 Linear / pro-rata (proportional to stake)
TUNA staking pool — rewards proportional to stake share
Standard pro-rata staking
6.3.2 Fixed-spread liquidation (Aave-style)
Stop-loss and liquidation mechanisms for leveraged LP positions
Liquidation mechanism for leveraged concentrated liquidity positions
2.3.1 On-chain treasury with governance control
Treasury holds 50% of TUNA supply at launch
Large treasury allocation
How the Pieces Interact
Leveraged concentrated liquidity amplifies IL exponentially — a 20% price move on 5x leverage can wipe out the entire position, triggering cascading liquidations
Limit orders interacting with AMM pools create complex execution paths exploitable for MEV or sandwich attacks
If treasury tokens enter circulation or are staked, they dilute revenue share for external TUNA stakers
Simultaneous liquidation of many leveraged positions could deplete lending pool liquidity
Stop-loss triggers may execute at unfavorable prices during high volatility due to thin range slippage
What Could Go Wrong
- Leveraged concentrated liquidity positions up to 5x amplify impermanent loss and liquidation risk during volatile market conditions
- First AMM on Solana with native on-chain limit orders introduces untested smart contract complexity
- Heavy treasury concentration (50% of token supply) creates potential sell pressure and centralization risk
- Protocol is less than 2 years old with limited battle-testing under extreme market stress
Leveraged LP Liquidation Cascade
ModerateTrigger: A sudden 30%+ price drop triggers mass liquidation of leveraged concentrated liquidity positions
- 1.Sharp market downturn moves prices outside most concentrated ranges — Leveraged positions approach liquidation thresholds
- 2.Mass liquidation of 5x leveraged positions — Lending pool liquidity drained as collateral is seized
- 3.Remaining positions cannot close due to depleted lending pool — Bad debt accumulates
- 4.TUNA price drops as confidence in solvency wanes — Revenue sharing becomes worthless, TVL collapses
Risk Profile at a Glance
Overall: C+ (37/100)
Lower score = safer