What Is the Relationship between Slippage and Liquidity Pool Size?

Slippage is the difference between the expected price of a trade and the price at which the trade is executed. In an AMM, larger liquidity pools have more tokens (a larger k), meaning a trade of a given size will have a smaller impact on the token price ratio.

Therefore, larger pool sizes generally result in lower slippage, providing a better execution price for the user base.