A spot ratio is not a promise that an entire order can execute at that ratio.
Understand the simplified model
A constant-product automated market maker relates two pool reserves through a product. Swaps add one asset and remove the other while following the pricing rule, with fees affecting real execution. The reserve ratio describes a local price, not a shelf containing unlimited units at one price. Other AMM designs use different curves or concentrate liquidity into ranges, so identify the pool model before applying this example.
Calculate a fee-free illustration
Imagine a simplified pool with 100 tokens and 10,000 units of a quote asset. Its product is 1,000,000. Adding 1,000 quote units makes that reserve 11,000; keeping the product unchanged leaves about 90.909 tokens. The buyer receives about 9.091 tokens and pays an average of roughly 110 quote units each. The starting reserve ratio was 100. The difference comes from moving along the curve, even without fees or competing transactions.
Separate impact and tolerance
Price impact describes how an order changes execution relative to the pool's starting conditions. Slippage tolerance is a user-defined bound on acceptable execution changes before the transaction runs. Increasing tolerance does not deepen the pool; it broadens the result the transaction is permitted to accept. A quote can also change because someone else trades first. Network fees and routing through several pools add further costs beyond the simplified reserve arithmetic.
Interrogate the final quote
Check the exact input and output assets, expected output, minimum output, route and deadline. Compare the order size with available liquidity along that route rather than a token's headline market capitalisation. If a platform shows a dramatic valuation but a small sale produces poor output, that is not an arithmetic contradiction: valuation and executable depth answer different questions. A simulation is useful evidence of current conditions, not a guarantee that the same conditions will exist when the transaction executes.
Sources & context
Sources checked 7 October 2026. This is explanatory coverage, not personalised investment advice. Our corrections policy.
