AMM Standard Liquidity Position

Each pool on Hyperswap holds reserves of two tokens, and the price of the tokens is determined by the ratio of these reserves. This system is designed to maintain a balance between the two tokens. Whenever a trade is made, the price of the tokens is updated based on the new ratio of reserves in the pool, following the constant product formula:

$$x*y = k$$

Where: - x = quantity of Token A in the pool - y = quantity of Token B in the pool - k = constant product This formula ensures that large trades significantly impact the token price, leading to slippage.