Liquidity depth describes executable size within a price band. In a constant-product AMM, reserves of assets X and Y satisfy x * y = k. Swapping moves price along the hyperbola; larger trades relative to reserves create larger price impact.
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Liquidity Depth / AMM constant product
How much size a pool can absorb; constant-product AMMs use x·y=k.
x · y = k
Related terms
Impermanent Loss
Temporary divergence in value when providing liquidity vs holding the assets.
Slippage / Price Impact
Difference between expected price and executed price; impact moves the book.
Total Value Locked (TVL)
Aggregate value of assets deposited in a protocol or across DeFi.