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How We Choose DEXs and Tokens

Last updated: June 2, 2026

BAGHOLDER is a non-custodial software tool. When you tap Buy, our software constructs an on-chain swap transaction that your wallet signs and the chain executes against a decentralized exchange (DEX) smart contract. We never act as a counterparty, custodian, or intermediary. The transaction settles between your wallet and the DEX's automated market maker (AMM) liquidity pool.

This page describes the objective, neutral criteria we use to select which DEX protocols and tokens appear in the App. It is intended to document our compliance with the U.S. Securities and Exchange Commission's April 13, 2026 staff statement providing broker-dealer registration relief for "Covered User Interface Providers." The criteria below are applied uniformly to every token and every chain.

1. We do not custody assets at any point

Your USDC, your tokens, and your wallet private keys remain in your non-custodial Privy MPC wallet at all times. BAGHOLDER's server has no signing authority over user assets and cannot move funds. Our operational wallets, used only to provide users with small amounts of native chain gas so their swaps can settle, are separate from any user-facing custody function and never receive USDC or tokens from users.

2. We do not act as a counterparty

The counterparty to every BAGHOLDER swap is the DEX liquidity pool itself — a smart contract holding deposits from many independent liquidity providers. BAGHOLDER takes no position in any token, holds no inventory, and earns nothing from the spread between buy and sell prices. Our economic relationship with the user is the flat 5% platform fee disclosed at the time of purchase.

3. Neutral venue selection criteria

Each chain we support has a fixed DEX cascade applied uniformly to every token. We do not select DEXs on a per-token or per-user basis, do not accept payment for order flow from any DEX or liquidity provider, and do not exercise discretion over which venue executes a specific user's swap. The cascade for each chain is:

  • Base: Aerodrome Concentrated Liquidity → Uniswap V3 → Aerodrome V2 (with WETH-hop variants)
  • Optimism, Arbitrum, Polygon, Avalanche: chain-specific four-DEX cascade following the same ordering principle
  • Solana: Jupiter V6 aggregator, which itself routes across all available Solana DEX protocols

The cascade ordering is set by the following objective factors:

  • Liquidity depth. Higher-liquidity venues are tried first because they produce lower price impact for the same trade size. We measure liquidity by simulated price impact at a $100 trade size during our four-hour token registry scan.
  • Auditability. Protocols whose contracts are open-source, formally audited, and have public on-chain settlement.
  • Transparency. Protocols where pool composition, fee structure, and routing logic are publicly observable on-chain.
  • Uptime / security. Protocols with a multi-year operational history, no unrecovered exploits, and active developer maintenance.
  • Neutrality. Protocols we apply the same way to every token. We do not negotiate special routing for specific tokens or token issuers.

4. Neutral token inclusion criteria

Our token registry across all six chains is curated against the following objective thresholds, applied uniformly:

  • Minimum $10 million market capitalization (CoinGecko-verified)
  • Minimum $100,000 in 24-hour trading volume (CoinGecko-verified)
  • Measured price impact at a $100 trade size not exceeding 6% — tokens that fail this threshold three consecutive 4-hour scans are delisted from the App
  • Stablecoins, real-world-asset (RWA) tokens, and tokens that have been the subject of unresolved U.S. enforcement actions identifying them as securities are excluded
  • Solana token registry uses adjusted thresholds ($5M market cap, $50K volume) reflecting that chain's liquidity profile

Token inclusion is automated by our liquidity monitor. We do not receive payment from token issuers, projects, or sponsors for listing or routing decisions. A user-facing display of the App's full token registry, its inclusion criteria, and its current delisted-token list is available within the App.

5. Uniform, transparent fees

BAGHOLDER charges a flat 5% platform fee on every buy, with a $0.50 minimum (so a $5 buy costs $0.50, not $0.25). This fee is the same across every chain, every token, every DEX, every user, and every purchase amount. It is disclosed before each purchase. We do not vary fees by token, by user, by DEX, by trade size, or by route. We do not accept rebates, kickbacks, or any form of payment for order flow from DEXs, liquidity providers, market makers, or token projects.

Network gas costs (paid in the chain's native token to settle the swap on-chain) are charged by the blockchain itself, not by BAGHOLDER, and accrue to validators / miners, not to BAGHOLDER. Where users do not hold sufficient native gas, BAGHOLDER may pay the gas from a separate operational wallet as a service feature included in the 5% platform fee; this gas funding is capped per request, per day, and per wallet, and is logged in our internal treasury ledger.

6. Prominent risk disclosure

Before any user can make a purchase, they must accept the App's "How Your Money Moves" disclosure, the Terms of Service, and the Privacy Policy. The disclosure describes the fund flow, non-custodial architecture, and material risks (volatility, irreversibility, regulatory uncertainty, token delisting). The disclosure is shown again whenever it is materially updated, and acceptance is recorded with the version and timestamp.

7. No order routing discretion

When a user taps Buy, the App attempts each DEX in the chain's fixed cascade in order until one returns a successful quote within the user's pre-set slippage tolerance (0.5% by default). The cascade order is set in advance per chain, applied identically to every token, and is not adjusted on a per-user or per-trade basis. BAGHOLDER does not interpose any order book, internalization engine, or off-chain matching. The user signs the resulting on-chain swap transaction with their own non-custodial wallet.

Why we publish this page

The U.S. Securities and Exchange Commission's April 13, 2026 staff statement contemplates that user interface providers facilitating the trading of digital assets that might be securities can operate without broker-dealer registration where they satisfy specific conditions, including objective venue evaluation, neutral fees, prominent risk disclosure, and no custody. We publish this page so that users, regulators, and counterparties can verify our compliance with that framework.

This page is part of the BAGHOLDER product documentation and may be updated as our token registry, DEX integrations, or regulatory posture evolve. Material changes will be reflected in the "Last updated" date above. This page does not constitute legal advice and is not part of the Terms of Service, but the conduct it describes is binding on our operation.

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