> ## Documentation Index
> Fetch the complete documentation index at: https://docs.priest.trade/llms.txt
> Use this file to discover all available pages before exploring further.

# The vAMM Primary Market

> Every newly launched coin on Priest.trade starts on the primary rail, powered by a virtual Automated Market Maker (vAMM).

Every newly launched coin on Priest.trade starts on the **primary rail**, powered by a virtual Automated Market Maker (vAMM).

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## What is a virtual AMM?

In a regular DEX pool (like Uniswap), people deposit real tokens and traders swap between them.

In a **virtual AMM**, the math works the same way ($x \cdot y = k$), but the pool reserves are virtual. There are no liquidity provider deposits inside the curve. The curve is just an on-chain calculator that determines the price based on buying and selling volume.

Your actual margin is held safely in the market's dedicated USDC vault.

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## Why start with a vAMM?

1. **Instant liquidity from block zero:** You don't need anyone to seed a pool with thousands of dollars before people can trade. The market is live the second the coin launches.
2. **Guaranteed fills:** There's no empty order book. Any size order can execute against the curve.
3. **Predictable price impact:** Buying pushes the curve price up; selling pushes it down.

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## How trades move the price

* **Opening a long:** Adds virtual USDC to the curve and pulls virtual tokens out. The price moves higher.
* **Opening a short:** Sells virtual tokens back to the curve and pulls virtual USDC out. The price moves lower.
* **Closing a position:** Reverses your trade on the curve, returning the virtual reserves back toward where they started.

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## Safety rules during the primary phase

* **24-hour warmup:** Max leverage is capped at **10x** during the first 24 hours of a coin's life. This keeps early price discovery from spinning out of control. After 24 hours, the cap raises to **40x**.
* **Open interest caps:** Total open interest is capped based on the curve's depth so positions can't grow larger than the market can safely settle.
* **Short buyback floor:** If longs hold almost all of the virtual tokens on the curve, large short exits can hit temporary price impact limits until long exposure reduces.

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## Moving to the secondary market

When a coin builds steady volume, broad trader distribution, and a healthy insurance reserve, it graduates. The protocol seeds a real Uniswap v4 spot pool, burns the LP tokens forever, and moves the perp to the secondary engine.

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## See also

* [Market Lifecycle](https://docs.priest.trade/core-concepts/market-lifecycle.md) — how a coin moves from launch to graduation.
* [Graduation into Uniswap v4](https://docs.priest.trade/launching-tokens/graduation.md) — the graduation process step by step.
* [Funding Rates](https://docs.priest.trade/core-concepts/funding-rates.md) — how perp prices stay close to spot.


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