Trading Mechanics

Deep dive into how SimuDEX calculates prices and handles swaps.

The AMM Formula

SimuDEX uses the Constant Product Formula popularized by Uniswap:

Where x is the amount of USDT in the pool, y is the amount of the token, and k is a constant.

Price Impact

When you buy a token, you add USDT to the pool and remove Token. This increases the price of the token relative to USDT. The larger your trade relative to the pool size, the higher the "Price Impact" (slippage).

Fees

Currently, a flat 1% fee is applied to every trade. These fees stay in the liquidity pool, slightly increasing the k value and benefitting token value over time.