Name a Common Mathematical Formula Used by AMMs besides $x Y = K$ ▴ Learn

Name a Common Mathematical Formula Used by AMMs besides $x Y = K$.

Another common formula is the Constant Sum Market Maker (CSMM), represented as $x + y = k$. This formula is ideal for assets that are meant to be pegged 1:1, such as stablecoins.

It results in a near-zero slippage for large trades as long as the pool is balanced. However, if the peg breaks, it can lead to the pool becoming completely drained of one asset, unlike the constant product formula.

How Are Stablecoins Different from Other Cryptocurrencies?

Name Two Other Common Types of Financial Derivatives besides Options

Explain the Difference between a Constant Product and a Constant Sum AMM Curve

What Is a “Stableswap” AMM and Why Is It Used for Stablecoins?