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A type of decentralized exchange protocol that relies on a mathematical formula to price assets. As with many other AMMs, we use the constant product market maker formula
y*x=kto price assets.
LPs are users that deposit liquidity into a pair and receive liquidity tokens. LPs help support healthy markets and are compensated with revenue earned from swap fees, and sometimes, incentives from DAOs.
Pools represent the active liquidity in the pair owned by liquidity providers. Pools dictate the swap ratio, or marginal price, between two assets.
Reservoirs are a novel concept pioneered by Buttonwood that represents the inactive liquidity in an asset pair. Reservoirs allow Poolside to maintain a consistent swap ratio and protect liquidity providers from an impermanent loss caused by arbitrage.
Tokens that allow users to access the liquidity of their staked assets.
Tokens that have balances that can change uniformly across all holders based on predetermined rules or external factors.
Tokens that appreciate in value based on an increasing exchange rate (rETH, swETH).