01How a pool holds a price
A constant-product pool has no opinion and no order book. It has two balances and one rule. What that rule produces, where the quoted price comes from, and why size decides everything.
Open the entryPools: what the balances are, and what they can defend
A pool is an account with two balances and a rule about how they may change. Everything else people say about it, including the price, is derived from those three things. The entries in this section stay inside that boundary and work outward from it.
The order is deliberate. First the invariant that turns two balances into a quote, then the ladder that turns a quote into an answer about size, then the transaction that creates or destroys a position, and finally the comparison that says what holding that position cost against simply holding the assets.
- What this section answers
- How reserves produce a price, how far that price holds, what minting and burning an LP token does, and where the gap against holding comes from.
- What it will not do
- Quote a yield, estimate a return, name a pool as safe or unsafe, or suggest that any position should be opened or closed.
- Where it hands off
- Movement between venues, withdrawal patterns and the sampling routine for watching depth change all sit in the Flows section.
4 entries filed under Pools
How a pool sets a price from its reserves, how far that price holds before it bends, what happens the moment you add or remove liquidity, and why an LP position can be worth less than the two assets held on their own.
02Reading depth properly
Total value locked answers almost nothing. Depth at a stated distance from mid answers most of it. How to read a ladder, why the two sides differ, and what concentrated ranges do to the picture.
Open the entry03Adding and removing liquidity
What actually happens in the transaction that mints an LP token, what the pool gives back when you burn it, and the checks worth doing before either side of that trip.
Open the entry04Impermanent loss in plain terms
The gap between an LP position and simply holding the two assets. Where the gap comes from, why it is not a fee, when the word impermanent is misleading, and what fees have to cover.
Open the entryWhere the pools section stops
Standing state is the tractable half. Reserves at a moment in time can be read exactly, and the arithmetic on top of them is closed-form. Working out why the balances moved, whether the depth went somewhere else and what that means for the next hour is a different problem, and it has its own section.
Flows
Liquidity is not a number, it is a balance that somebody keeps topping up or withdrawing. These entries follow the movement: where it comes from, why it leaves, and how to watch it change without staring at a chart.
Open the sectionTerms
Thirty terms from the liquidity side of a Solana market, each written as one paragraph a reader can act on rather than a dictionary line that repeats the phrase back at them.
Open the glossaryThe desk
What this ledger covers, which questions it refuses on the grounds that reserve data cannot answer them, and how a correction is handled when an entry turns out to be wrong.
Read about the desk