How does the constant product formula affect the liquidity of digital currencies?

1 answers

• Mr.NILESH SHAHJun 11, 2025 · a month ago
  At BYDFi, we have implemented the constant product formula in our decentralized exchange to enhance liquidity. The formula allows traders to easily swap between different digital currencies without relying on a centralized order book. By providing liquidity to the liquidity pool, traders can earn fees and contribute to the overall liquidity of the platform. The constant product formula ensures that the liquidity pool remains balanced, allowing traders to execute trades quickly and efficiently. This mechanism has significantly improved the liquidity of digital currencies on our platform, making it a preferred choice for traders.
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