Uneven Pool Weights

Enhancing liquidity and trade execution for spot markets

The protocol utilizes Balancer’s Constant Product Market Maker (CPMM) model for underlying liquidity pools allowing for users to contribute liquidity in different proportions (i.e. 30/70) as opposed to traditional LPs which are generally balanced equally.

• As traders buy and sell assets from the pool, the amount of assets in the pool will change and fluctuate.

• Automated Market Makers automatically adjust the prices of each asset by keeping the following equation in check:

$$\prod_{i=1}^{n} R_{i}^{w{_i}} = k,$$

where

• R is the reserves of each asset;

• W is the weights of each asset;

• k is the constant.

In other words, in the absence of fees, constant mean markets ensure that the weighted geometric mean of the reserves remains constant.