DeFi Automated Market Maker (AMM) Pool Simulator

Swap

Trade size 100 A

LP fee 0.30%

Pool State

Reserve A1000.00

Reserve B1000.00

Invariant k1,000,000

Spot price (B/A)

1.0000

Pending slippage

0.00%

Impermanent loss

0.00%

Fees earned (B-eq.)

0.00

Pool initialised: 1000 A / 1000 B.

How it works

This is a constant-product Automated Market Maker (AMM), the mechanism behind Uniswap-style decentralized exchanges. A liquidity pool holds two reserves, x (Token A) and y (Token B), and enforces:

x · y = k   (invariant, only grows from trading fees)
spot price  P = y / x
swap A→B:   Δy_out = y − k / (x + Δx·(1−fee))
slippage    = (executionPrice − spotPrice) / spotPrice
impermanent loss = 2·√r / (1+r) − 1,  r = P_now / P_initial

Execute Swap — routes the trade size through the formula above; the curve marker slides to the new (x,y) point and the pool bars resize.
LP fee — the input amount is reduced by the fee before it hits the formula, but the full amount (including fee) is added to the reserve, so k strictly increases with every trade — that growth is the fee revenue liquidity providers earn.
Add/Remove Liquidity — scales both reserves proportionally, leaving the spot price unchanged but changing pool depth (and therefore future slippage).
External Price Shock — simulates an arbitrageur trading the pool back to a randomly shifted "true" market price, which is exactly how impermanent loss arises for real LPs: the pool price is forced to follow the external market via arbitrage.
Impermanent loss — the gap between the value of an LP position and simply holding the two tokens, purely as a function of how far the price has moved from when liquidity was deposited.

Real-world relevance: this exact formula (with a 0.3% fee) runs inside Uniswap v2, SushiSwap and dozens of other DEXs, routing hundreds of billions of dollars in trades without an order book or a counterparty — only reserves and math.

Pool state (x,y) Reserve A bar Reserve B bar x·y = k curve

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