Keep these points about AMMs (automated market makers) in mind:
1) AMMs don’t match buyers and sellers trade by trade. Instead, traders trade against the two tokens in a liquidity pool.
2) The more of a token is swapped out of a pool, the scarcer the remaining supply becomes and the higher its price rises, so large trades cause greater slippage.
3) For tokens in shallow pools, check the displayed price impact before making a large swap. You can split it into several smaller trades.
$UNI is the protocol governance token of Uniswap, which helped popularize AMMs.
#UNI
1) AMMs don’t match buyers and sellers trade by trade. Instead, traders trade against the two tokens in a liquidity pool.
2) The more of a token is swapped out of a pool, the scarcer the remaining supply becomes and the higher its price rises, so large trades cause greater slippage.
3) For tokens in shallow pools, check the displayed price impact before making a large swap. You can split it into several smaller trades.
$UNI is the protocol governance token of Uniswap, which helped popularize AMMs.
#UNI