Study Notes | AMM Automated Market Maker
① Uniswap V2 uses the x × y = k model: excluding fees, the product of the quantities of the two tokens in the pool remains unchanged before and after a trade.
② The more of one token is swapped out of the pool, the less remains and the higher its price becomes. That’s why large trades have a greater price impact.
③ For tokens with shallow liquidity pools, check the estimated slippage before placing a large trade. You can split it into several smaller trades.
$UNI 7.748 (+2.23%)
#UNI
① Uniswap V2 uses the x × y = k model: excluding fees, the product of the quantities of the two tokens in the pool remains unchanged before and after a trade.
② The more of one token is swapped out of the pool, the less remains and the higher its price becomes. That’s why large trades have a greater price impact.
③ For tokens with shallow liquidity pools, check the estimated slippage before placing a large trade. You can split it into several smaller trades.
$UNI 7.748 (+2.23%)
#UNI