# readme.md

How IMD 404 works, in ten short parts. One idea at a time.

## the idea

IMD404 is a token on Uniswap v4. On every swap of IMD404, 1% goes to buy IMD, the Identity.md token.

The IMD that is bought is cut in two. One half goes into a vault and stays there. The other half is paid to the people who deposited their IMD404.

a swap of IMD404 1% in ETH the wall IMD half half the vault depositors
The whole protocol, left to right.

IMD404 is an independent project. It is not created, endorsed or supported by Identity.md. It buys IMD on the market, like anyone can.

## what a swap pays

1.30%on every swap, buying or selling

1.00% is the levy. It is the part that buys IMD. The other 0.30% is the pool fee, and it goes to liquidity providers.

The levy is always taken in ETH, whichever way you trade. The protocol never holds IMD404, so it never has any to sell against its own holders.

A round trip costs 2.60%. That is more than an ordinary pool. The 1% is the price of the buyback, and it is the same for everyone.

1.00% buys IMD 0.30% the levy, always taken in ETH to liquidity providers you buy with 1 ETH 0.01 ETH goes to the wall, 0.99 ETH buys you sell for 1 ETH you receive 0.99 ETH
Where the 1.30% goes.

## the wall

The ETH does not buy IMD right away. It is placed as buy orders just under the price of IMD, in the main pool where IMD trades. That band of orders is the wall.

The wall covers three ticks and goes about 6% under the price. While the price stays above it, the ETH waits. When IMD dips into the band, the ETH turns into IMD, little by little.

The wall is paid to be there. Whoever sells IMD into it pays it the 1% fee of that pool.

price of IMD IMD dips [x] filled: the ETH became IMD [ ] waiting, in ETH [ ] waiting, in ETH tick 1 tick 2 tick 3 about 6% deep
The wall, seen from the side. The price comes down into it.

## upkeep

10 minbetween two upkeeps, at least

The wall does not move by itself. From time to time the IMD it has bought is collected, and the ETH that is left is placed again, just under the price of the moment. That is the upkeep.

There is no bot to run. A swap of IMD404 triggers the upkeep when the last one is more than ten minutes old. Anyone can also call it by hand, and nobody is paid for it.

A wall that is not kept up falls behind when IMD rises. So vault.md shows the time since the last upkeep. It is the vital sign of the protocol.

collect the IMD the wall has bought cut it in two vault and depositors place the ETH again just under the price every ten minutes or so, on a swap of IMD404
One upkeep. The swaps themselves keep the wall.

## where the IMD goes

Each time IMD is collected, it is cut in two equal parts.

One half goes into the vault. The vault never sells and never lends. The other half is shared between depositors, in proportion to what each of them deposited.

If nobody has deposited, there is nobody to pay, and all of it goes to the vault.

IMD collected 50% the vault 50% depositors nobody has deposited: everything goes to the vault
Half and half, at every upkeep.

## the number to watch

One number says it all: how much IMD sits in the vault behind each million IMD404.

A buyback adds IMD to the vault, so the number goes up. An exit takes IMD out, but it retires tokens faster, so the number goes up too. Nothing else touches it. No function creates IMD404, and none takes IMD out of the vault another way.

The rules were run on 200,000 random operations. Largest drop observed: zero.

IMD per 1M IMD404 buyback exit buyback exit time no step goes down
The only two things that move the number both move it up.

It is counted in IMD, not in dollars. If IMD loses half its value, what the vault is worth in dollars loses half too.

## leaving

90%of your share leaves with you, in IMD

You can hand back your IMD404 whenever you want. You receive 90% of the share of the vault that stands behind them. The other 10% stays in the vault, for those who remain.

The IMD404 you hand back are retired for good. Nobody can take them out again, not even the protocol.

Every exit leaves a little more for the others. The last one out receives the most, so there is no reason to run for the door.

the share of the vault behind the IMD404 you hand back 90% leaves with you, in IMD 10% stays in the vault for those who remain the IMD404 handed back are retired for good
One exit.

## depositing

24 hof lock after each deposit

Deposit your IMD404 and you receive IMD at every buyback. You claim it when you want, in one go or in several. What you do not claim waits for you.

A deposit cannot be withdrawn for 24 hours, and each new deposit restarts the delay. Without that lock, someone could borrow millions of IMD404 for a few seconds and walk away with almost all of a payout.

What depositors receive depends entirely on activity. No volume, no buyback, nothing to share. And those who do not deposit are not forgotten: the vault grows for everyone.

each buyback: IMD to claim deposit locked 24 hours free to withdraw a new deposit restarts the 24 hours
A deposit over time.

## what it does not do

  • It does not move the price of IMD. If IMD404 trades $150,000 a day, the buyback is $1,500 a day: 0.05% of what IMD trades. It stacks IMD. It does not push it.
  • The vault starts at zero. It fills swap after swap, and it holds nothing but IMD.
  • The wall does not buy cheaper. Replayed on 57 real days of IMD prices, it ended with 1% more IMD than buying directly, and that 1% is the fee it earns.
  • It cannot block a swap. No size limit, no blacklist, no pause.
  • Nobody can change a setting. There is no owner and no vote.
IMD traded in a day $3.14 million bought back in a day, if IMD404 trades $150,000 $1,500: 0.05% of it
The honest scale, with the figures read on 13 October 2026. The help goes from IMD to IMD404, not the other way.

## open questions

The wall trusts one pool. It reads its price from the main pool of IMD, and that price is hard to fake because the pool is deep: about $2.7 million of liquidity.

If that liquidity moved somewhere else, the price of an emptied pool would mean little. Someone could lead the wall to a bad price and sell it IMD too high. The loss would be limited to what the wall holds, but it would be real. And nobody can move the wall: there is no administrator.

hard to push $2.7 million of liquidity today: the price means something easy to push if the liquidity leaves the wall can be led to a bad price
Why the depth of that one pool matters. Liquidity read on 13 October 2026.
  • The vault holds only IMD. What happens to IMD happens to it. Read on chain on 13 October 2026: IMD is a bridged token, and its owner is a single address.
  • The six settings are final. If one of them is badly chosen, it stays that way.
  • At very low volume the wall is not worth its gas. The mechanism needs activity.
  • Paying depositors a share of fees is the kind of mechanism regulators look at. Nothing in this file is legal advice.

## a few words

IMD
The Identity.md token, at 0xD34a99Bc0f67aE1bbd63C660e6d0b0dd03E263B7. The protocol knows it by this address, never by its name.
IMD404
The token of this protocol. An ordinary ERC-20, one billion of them, with no special function.
the levy
1% of every swap of IMD404, always taken in ETH.
the wall
The buy orders for IMD placed under its price, over three ticks.
a tick
One price step of the pool where IMD trades: 2.02%.
upkeep
Collecting the IMD the wall has bought, then placing the ETH again under the price.
the vault
The contract that keeps the IMD. Its only way out is an exit.
a depositor
Someone who has placed IMD404 in the vault to receive half of each buyback.
the lock
The 24 hours during which a deposit cannot be withdrawn.
an exit
Handing back IMD404 to receive 90% of their share of the vault.

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IMD404 is an independent project. It is not created, endorsed or supported by Identity.md.