Which AMM Pool is More profitable?
Suppose that Alice and Bob both open weighted constant sum market maker pools containing Token X and Token Y. Alice decides to use the equation 2x + 5y = k, and Bob decides to use the equation 5x + 2y = k. If someone wants to trade Token X into the pool to receive Token Y in exchange, which of the pools would be more attractive? (You may assume that each pool has a sufficient amount of Token Y for the desire trade.)
Alice:
The above tells me how much Y I get back given a trade
The amount depends upon the (x,y) pair being traded. Let's see if I can get them to cancel out if I am comparing.
Bob:
If we can compare the price as
In both cases, we probably could substitute their respective constant product equation.
This would allow us to remove y and subtitute x.
However, it would still mean that in both cases