Skip to content

Latest commit

 

History

History
23 lines (13 loc) · 628 Bytes

math.md

File metadata and controls

23 lines (13 loc) · 628 Bytes

Math

Consider x and y to be the token amounts available in the liquidity pool.

A Constant Product Market Maker (CPMM) Curve is a curve that is defined by the following equation:

x * y = k

where k is called the pool invariant.

It tries to keep the product constant. If you need to exchange a number of tokens , you will receive y - k/(x+a) tokens.

However, this curve is not suited for stablecoins because the amount you get of exchanging goes down as you try to exchange more tokens.

Hence, a new curve needs to be defined that is more suited for stablecoins.

`

Goto Home

Goto Home