How Does Pool Depth (Total Liquidity) Influence the Amount of Slippage?

Deeper liquidity pools (higher TVL) result in lower slippage for a given trade size. This is because a large trade causes a smaller percentage change in the total reserves (x and y) of a deep pool compared to a shallow pool.

A smaller change in the token ratio means a smaller price movement along the bonding curve, thus less slippage.