The mechanics of the liquidity pool on DEX

Many people wonder how DEX tegro.finance works, we always go out of our way to help users, so we have prepared a comprehensive explanation.

Our DEX, like the others, is based on a constant product formula: x * y = k, where x is TON, y is token, k is a constant.

The user adds liquidity to the common pool using two cryptocurrencies, e.g. TON and TGR, and for that receives LP-tokens, which confirm his ownership of a share from the liquidity pool.

When the pool is actively traded, the ratio of assets changes, but their product (x*y=k) does not.

All exchange fees go immediately into the liquidity pool, hence the value of LP-tokens (k) becomes greater.