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What Is the Impact of Deep Liquidity on the Amount of Slippage Experienced?

Deep liquidity minimizes slippage because a large trade causes a smaller percentage change in the pool's token ratio.
Greeks.Live21.11.25

What Is the Impact of Deep Liquidity on the Amount of Slippage Experienced?

Deep liquidity (a large 'k' value, or high TVL) significantly reduces the amount of slippage experienced for any given trade size. This is because a larger pool requires a much larger trade to cause the same percentage change in the $x/y$ ratio.

Traders prefer deep liquidity pools because they can execute large orders with minimal price impact, making the pool more attractive for large-scale trading.

Define “Impermanent Loss” in Terms of the Price Movement and the Pool’s Ratio Change
What Is the Mathematical Relationship between the Price and the Ratio of Tokens in an X Y = K Pool?
What Is the Maximum Percentage Change in Difficulty Allowed per Adjustment?
How Does Pool Depth (Total Liquidity) Influence the Amount of Slippage?

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