How Does Adding Liquidity to a Pool Affect Its Resistance to Price Manipulation?

Adding liquidity increases the total value of $k$ in the $x cdot y = k$ formula, making the price curve flatter. A flatter curve means that a larger trade (more capital injection) is required to cause the same magnitude of price change.

Therefore, deeper liquidity significantly increases the cost of a flash loan price manipulation attack, making the pool and any dependent oracle more secure.