With no order book, how does a DEX determine prices?
Uniswap V2 uses the x × y = k model: excluding fees, the product of the quantities of the two tokens in the liquidity pool stays the same before and after a swap.
For tokens with low liquidity, check the estimated price impact before making a large buy or sell, and split it into several trades if necessary.
$UNI is the governance token of Uniswap, which popularized AMMs.
What topics would you like to learn about? Drop a comment.
Uniswap V2 uses the x × y = k model: excluding fees, the product of the quantities of the two tokens in the liquidity pool stays the same before and after a swap.
For tokens with low liquidity, check the estimated price impact before making a large buy or sell, and split it into several trades if necessary.
$UNI is the governance token of Uniswap, which popularized AMMs.
What topics would you like to learn about? Drop a comment.