How Does the “Amplification Factor” in StableSwap Affect the Curve’s Shape and Slippage?

The amplification factor (A) is a parameter that determines how closely the StableSwap curve approximates the constant sum formula near the 1:1 peg. A higher A value creates a flatter curve around the peg, meaning lower slippage and deeper virtual liquidity.

This optimization is crucial for efficient stablecoin trading. However, a very high A also increases the risk of severe impermanent loss if the peg breaks, as the pool is more easily drained of the healthy asset.