What Is the Relationship between Pool Depth and the Magnitude of Slippage?
Pool depth (liquidity) is inversely proportional to the magnitude of slippage. In a deep pool, a large trade causes only a small change in the token ratio, resulting in low slippage.
In a shallow pool, the same trade causes a massive change in the ratio, leading to high slippage. High slippage is what attackers exploit to temporarily manipulate the price for an oracle.
