> For the complete documentation index, see [llms.txt](https://quanterrafinance.gitbook.io/quanterra-finance-whitepaper/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://quanterrafinance.gitbook.io/quanterra-finance-whitepaper/quanterra-auto-liquidity-mechanism-qalm.md).

# Quanterra Auto-Liquidity Mechanism (QALM)

Auto Liquidity

**Market liquidity is critical and is instrumental in enabling the buy and sell of $QUANT on PancakeSwap.**

Liquidity can be thought of as a large pool of money that is split 50/50 between $QUANT and $BNB. There is a conversion factor set to the amount of $QUANT that can be obtained through BNB, for example: 1 BNB equals 24.66 $QUANT.

When someone purchases $QUANT, the price per $QUANT increases, and the ratio above changes to account for this. The same holds true for sells.

Liquidity enables anyone to buy and sell their QUANT/BNB at any time, but the less money/liquidity in the pool, the lower the price, which is why our Quanterra Auto-Liquidity Mechanism (QALM) automatically adds more liquidity to the pool, resolving that issue.

#### <mark style="color:orange;">The Quanterra Auto-Liquidity Mechanism (QALM) operates as follows:</mark>

Our Quanterra Auto-Liquidity Mechanism (QALM) will automatically inject liquidity into the market every 48 hours. Each buy or sell order incurs a **4% tax**, which is automatically stored in an Auto-LP wallet. Additionally, our protocol's smart contract includes a mechanism that intelligently takes 50% of the $QUANT stored in the wallet and **automatically** purchases BNB at the current market price.

The remaining 50% of $QUANT in the Auto-LP wallet will be used for Quanterra liquidity, resulting in a 50/50 weighting of $QUANT/BNB that will be **automatically** added as new, additional liquidity to the market pair, thereby increasing the pool's liquidity.

The QALM will accomplish this **every 48 hours** by increasing the pool's liquidity, allowing $QUANT holders to easily sell their tokens at any time with minimal to no market slippage. Additionally, it will aid in **maintaining protocol stability**, ensuring that the APY is maintained for the duration of Quanterra.