xrefers to the amount of the first token in the pool, and
yrefers to the amount of the other token in pool. Finally,
kis the pool's constant product. Let's use the AVAX-SNOB pool on Pangolin as an example:
kwould increase since there are more tokens in the pool, but your percentage share of the pool would decrease proportionally. Therefore, other than receiving a smaller percentage of trading fees over time, your LP position would not be majorly affected.
kwould increase. However, since there are still the same amount of LP tokens in circulation, your share of the pool is unaffected. This means your LP tokens are now worth more. For example, if you owned 0.5% of the pool:
yare the token balances at any given time.
kis the product constant that we calculated beforehand.
rrefers to the ratio of tokens at any given time. We can test these equations with our original values prior to the price change: