A pool is not an order book
A swap does not need a person posting the opposite order. Uniswap uses pools of assets and rules that determine the exchange as the pool changes. The protocol, a website that accesses it, a liquidity position and the UNI token are four different things. UNI is a governance token; it is not the receipt for your share of a pool.
Where the price comes from
In a simple constant-product pool, buying one asset removes it from the reserve while adding the other. The resulting price changes with the trade. Versions 3 and 4 let liquidity providers choose price ranges, so liquidity available near the current price matters more than a single headline pool balance. A position can become inactive when the price moves outside its range.
Price impact and slippage
Price impact describes the effect of your own trade on a pool. Slippage describes a difference between the quoted and executed result, which may also reflect other activity before inclusion. A minimum-output setting limits the acceptable execution result; it does not remove risk or make the quote a promise.
What UNI actually does
UNI voting power can be delegated. The current token documentation also describes protocol fees used to burn UNI. Neither mechanism gives each holder a proportional withdrawal right over liquidity reserves. Pool fees, protocol fees, network fees and the price of UNI belong to separate calculations. Start by naming the role you are studying: trader, liquidity provider or governance participant.
- 011,000 A · 1,000 B
- 02Add 100 A
- 03Keep x × y constant
- 04Receive about 90.91 B
Read these as connected concepts, not necessarily consecutive steps.
Read the explanation
Use a deliberately simplified constant-product pool: x × y = k. With 1,000 units of A and 1,000 of B, k is 1,000,000. Adding 100 A gives x = 1,100, so y must become 909.09 B; the output is about 90.91 B. The starting reserve ratio is not a fixed rate for the entire trade. This calculation isolates price impact; real swaps also involve fees, routing and changing market conditions.
Put the mechanism into context
The fictional pool starts with 1,000 A and 1,000 B. Another learner expects 100 B in exchange for 100 A because the initial ratio is one to one. Apply the reserve rule before deciding.
Apply it in the workshop →What this mechanism does not guarantee
This is a no-fee, single-pool model, not a current quote or a full representation of concentrated liquidity. A trade can execute exactly as quoted and still have price impact.