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

# How Bolt Liquidity Works

> Market data to settlement, in four steps.

Bolt Liquidity continuously reads the market, constructs a price, and publishes it onchain. When a trade arrives, execution and settlement happen atomically against available pool inventory.

**globe**

Real-Time Global Market Data

**swap**

Hedge / Rebalance Liquidity

ORACLE

SMART CONTRACTS

AVO Price

Pool Liquidity

Position Engine

**bars**

Hedge

**scales**

Rebalance

**users**

Users

**shake**

Partners

**Market data informs the price. Smart contracts make it executable onchain. Pool inventory provides the capacity to settle against it.**

**1. Read the market**

We ingest live top-of-book prices and sizes from the venues driving global price discovery and combine them into a cross-venue market composite.

**2. Compute the price**

The market composite is converted into an executable bid and ask. The quote incorporates current market conditions, risk controls, and may carry a directional view before it is submitted onchain.

**3. Commit it onchain**

The executable quote is posted onchain. The contract bounds how far each newly posted price can move from the **previous posted price**. That constraint is enforced and readable onchain.

**4. Settle against the quote**

Your trade executes against available pool inventory at the posted price and settles atomically in a single transaction. If the requested size exceeds the capacity available to that quote, the trade is rejected rather than walking down a pool-derived pricing curve.

***

## What the pool does and does not do

**The pool provides execution capacity. It does not form the reference price.**

| Quantity | Determined by |
| - | - |
| Reference price | External market data, not local pool state |
| Executable size | Available pool inventory and quote limits |
| Directional capacity | Current reserves; capacity may differ by side |
| Above available capacity | The trade is rejected rather than repriced down a local curve |

**Price formation and execution capacity are separate.** Price formation does not depend on local pool depth. Executable size depends on available inventory and the limits applicable to each quote.

> [!NOTE]
>
> **Over 100x Capital Turnover.** Each dollar of onchain liquidity supports over a hundred times its value in daily client volume. [See how Capital Turnover works](/capital-efficiency.md)

***

## Slippage and price impact

In a curve-based AMM, execution can move through the pool as trade size increases, so the realized execution price can differ from the initial quote.

Bolt Liquidity posts an executable price before the trade. The cost is incorporated into that quote rather than discovered as the trade moves down a local pricing curve. So the price you see at the time of the swap is the price you receive at execution.

> **[Where to Trade](/where-to-trade.md)**
>
> Live pairs and live routes.

> **[Offchain Quoting](/offchain-quoting.md)**
>
> Quote without submitting a transaction.


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