With no order book, how does a DEX determine prices?
The deeper the pool, the less impact a trade of the same size has on the price. As people often say, “the deeper the liquidity, the lower the slippage.”
Uniswap V2 charges a 0.3% fee on every trade, which used to go entirely to LPs. After governance enabled the protocol fee, the protocol takes 0.05% from V2 pools on Ethereum mainnet, and LPs get 0.25%.
Me before: Just place the order. Me now: Understand the rules.
Understanding the mechanics can help you avoid some pitfalls, but it can’t replace risk management.
$UNI 6.087 (-2.17%)
The deeper the pool, the less impact a trade of the same size has on the price. As people often say, “the deeper the liquidity, the lower the slippage.”
Uniswap V2 charges a 0.3% fee on every trade, which used to go entirely to LPs. After governance enabled the protocol fee, the protocol takes 0.05% from V2 pools on Ethereum mainnet, and LPs get 0.25%.
Me before: Just place the order. Me now: Understand the rules.
Understanding the mechanics can help you avoid some pitfalls, but it can’t replace risk management.
$UNI 6.087 (-2.17%)
