When I first heard about liquidity pools, I imagined a tropical oasis where tokens go to chill and earn passive income. 🏖️
Reality? It's more like a math gym where tokens are forced to work out… forever.
Or better yet — imagine a swimming pool, split into two lanes:
🐤 One side full of yellow ducks (say, USDT),
🍓 The other — berries (like ZKJ).
Every time someone jumps in to grab more ducks, they have to leave berries behind to keep the balance.
More ducks out = fewer berries = price shift. And the pool doesn’t complain — it just recalculates.
That’s how AMMs work:
🧮 X × Y = K
X and Y are the two tokens in the pool. K is the magic number that stays constant.
When someone swaps one token, the ratio changes, and boom — the price adjusts.
So when someone swaps USDT for ZKJ, the pool’s like:
“Fine, take your ZKJ, but next time it’ll cost you more.”
(Market dynamics, with passive-aggressive flair.)
Seeing it this way helped me realize:
DeFi isn’t magic — it’s just transparent math.
And that’s weirdly empowering for someone who still counts on fingers.
Next post I’ll dig into yield — because apparently, these pools don’t just rebalance ducks and berries… they also pay you. Stay tuned 🐣
🟡 What helped you understand AMMs? Got a better metaphor?
Drop it in the comments!
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