Unsupported token types

Fee-on-transfer, rebasing, and deflationary tokens are not supported by the Aquarius AMM — why, and what happens if they enter a pool.

Introduction

The Aquarius AMM on the Stellar network supports only standard SEP-41 compliant tokens, which maintain a fixed supply and predictable transfer behavior. Certain non-standard tokens — fee-on-transfer, rebasing, and deflationary tokens — are not supported, because their behavior is incompatible with the AMM's internal accounting and liquidity management.

Unsupported token types

Fee-on-Transfer tokens

These tokens automatically deduct a fee on each transfer, so the recipient receives less than the amount sent.

Why they are unsupported: the AMM's balance tracking assumes the entire transferred amount is received. The deducted fee creates a mismatch between recorded and actual balances, which leads to inaccurate pool accounting.

Rebasing tokens

Rebasing tokens periodically adjust their total supply, increasing or decreasing balances for all holders based on preset conditions.

Why they are unsupported: the AMM expects token balances to remain stable unless explicitly changed by user actions. Rebasing introduces unexpected balance changes, leading to pricing errors and liquidity imbalances.

Deflationary tokens

Deflationary tokens burn a portion of each transfer, gradually reducing total supply over time.

Why they are unsupported: as with fee-on-transfer tokens, the received amount differs from the sent amount, which disrupts the AMM's balance calculations and causes inaccurate pricing and pool valuation errors.

Impact of adding unsupported tokens

Adding fee-on-transfer, rebasing, or deflationary tokens to Aquarius liquidity pools can cause significant operational and financial issues:

• Imbalanced pool accounting — the AMM may fail to accurately track token balances, resulting in pricing errors and liquidity mismanagement.

• Increased exploitation risk — discrepancies create arbitrage opportunities where users can manipulate pool imbalances for unfair gains, harming liquidity providers.

• Financial loss for LPs — liquidity providers may suffer reduced returns due to inefficient liquidity allocation and inaccurate token pricing.

By ensuring that only compatible tokens are used, Aquarius maintains accurate accounting, fair liquidity management, and a secure trading environment.