How Does a ‘Hybrid AMM’ (Like Curve’s Stableswap) Combine Features of Constant Product and Constant Sum?

A hybrid AMM uses a bonding curve that behaves like a Constant Sum model ($x+y=k$) near the 1:1 peg, offering minimal slippage for large stablecoin trades. However, as the price ratio deviates significantly from the peg, the curve gradually transitions to resemble a Constant Product model ($x y=k$).

This provides high capital efficiency near the peg while ensuring the pool cannot be fully drained if the peg breaks.