Can you explain why x*y = L^2? The entire paper is predicated on this assertion which they do not explain. xy=k is a much more intuitive equation because you understand that it does not matter what K is because its simply a derivative of the relationship of x and y. But to introduce L which in itself is a concept of liquidity, yet nowhere states how it is measured, and to use it everywhere feels like circular logic IMO. Where does L come from and which variables are seeded first in this x*y = L^2 relationship?
bonding curves within uniswap are defined under xy = L^2 meaning that a trade of △x units of asset "x" for △y units of asset "y", generates the bonding curve of (x + △x)(y + △y) = L^2 hence why they use xy = L^2 if I understood correctly
@@escrow9004 Thanks for the response. I get where x and y come from, but I'm conceptually confused why they decided to assert that K = L^2? It's clear how K behaves as an arbitrary constant derived from two real variables. The equation was traditionally (x + △x)(y + △y) = k. This is mainly because uniswap v3 still uses constant product bonding curves within ticks. So the only actual definition is xy = k within each tick price range, and xy = L^2 is actually a derived generalisation of xy = k across all ticks. However L cannot simultaneously be a variable: a measurement of liquidity in the pool, and also be a derivative of known variables: x and y.
@@papismurfie I look at it the other way round: changes in x and y (in relation to one another), ie. price impact, are derived from levels of liquidity between two ticks.. ie. whole curve is an aggregation of many individual curves.. I could be completely wrong though.. in which case please correct me..
@@cryptomadic1650 Thanks for the reply! And very interesting take. I think I see what you mean. In this case though, how does one first calculate the amount of liquidity change in a trade in order to figure out price impact, thus slippage and actual price to be paid for the trade? In the simpler x*y model, you would provide some input x and receive some output y, or vice versa, you request some output y and it requires some input x. If changes in x and y are derived from liquidity, that means there must first be some other definition of liquidity that seems to be missing from all this. Then x and y are derived thereafter. However, even from the whitepaper, every reference to L and L^2 are conjoined with x and y.
I need some help with picking out a computer to purchase that will be good for your tutorials. I was looking at the MacBook Pro, but I remember there was a problem with the M1. Is this true or what would you recommend? What specs are important?
amount of tokens in the Uniswap contract (This is called pair in UniswapV2Pair in V2, UniswapV3Pool in V3) Actual amount of tokens may differ from the reserves
brings memories on microeconomics for calculating the market demand. NICE vid
Can you explain why x*y = L^2? The entire paper is predicated on this assertion which they do not explain. xy=k is a much more intuitive equation because you understand that it does not matter what K is because its simply a derivative of the relationship of x and y. But to introduce L which in itself is a concept of liquidity, yet nowhere states how it is measured, and to use it everywhere feels like circular logic IMO.
Where does L come from and which variables are seeded first in this x*y = L^2 relationship?
bonding curves within uniswap are defined under xy = L^2
meaning that a trade of △x units of asset "x" for △y units of asset "y", generates the bonding curve of (x + △x)(y + △y) = L^2
hence why they use xy = L^2 if I understood correctly
@@escrow9004 Thanks for the response. I get where x and y come from, but I'm conceptually confused why they decided to assert that K = L^2?
It's clear how K behaves as an arbitrary constant derived from two real variables. The equation was traditionally (x + △x)(y + △y) = k.
This is mainly because uniswap v3 still uses constant product bonding curves within ticks. So the only actual definition is xy = k within each tick price range, and xy = L^2 is actually a derived generalisation of xy = k across all ticks.
However L cannot simultaneously be a variable: a measurement of liquidity in the pool, and also be a derivative of known variables: x and y.
@@papismurfie I look at it the other way round: changes in x and y (in relation to one another), ie. price impact, are derived from levels of liquidity between two ticks.. ie. whole curve is an aggregation of many individual curves.. I could be completely wrong though.. in which case please correct me..
@@cryptomadic1650 Thanks for the reply! And very interesting take.
I think I see what you mean. In this case though, how does one first calculate the amount of liquidity change in a trade in order to figure out price impact, thus slippage and actual price to be paid for the trade?
In the simpler x*y model, you would provide some input x and receive some output y, or vice versa, you request some output y and it requires some input x.
If changes in x and y are derived from liquidity, that means there must first be some other definition of liquidity that seems to be missing from all this. Then x and y are derived thereafter. However, even from the whitepaper, every reference to L and L^2 are conjoined with x and y.
I've been looking for this, still cant find it. We have the same question xd
It helps a lot! Thank you! But why do we let x=x_real + x_virtual? Is there an intuitive explanation?
x_real = actual amount of tokens
x_virtual = non-existing amount of tokens that are needed for concentrated liquidity
I need some help with picking out a computer to purchase that will be good for your tutorials. I was looking at the MacBook Pro, but I remember there was a problem with the M1. Is this true or what would you recommend? What specs are important?
great break down, thanks
thank you!!
Can you do a tutorial on how to create a yield farming smart contract? Thanks a lot!!
Thanks!!!
i don't understand why P = Pb, xr = 0 ?.
What is the exact meaning of Reserve in Uniswap?
amount of tokens in the Uniswap contract (This is called pair in UniswapV2Pair in V2, UniswapV3Pool in V3)
Actual amount of tokens may differ from the reserves
Nice 👍👏😊 video | #bevegan