Liquidity Pool (LP) Explained with DuckLaser X (DLZR)
A quick, visual guide to how DLZR pairs with SOL in an AMM pool (constant product x·y=k). Values below ignore fees for clarity.
Left side — DLZR
Supply in LP850,000,000 DLZR
Right side — SOL
Liquidity in LP10 SOL
Both sides represent equal starting value (at launch price).
🔢 Initial Value Calculation
Pool invariant k10 × 850,000,000 = 8,500,000,000
DLZR in circulation850,000,000
Price per DLZR (in SOL)0.000000011765 SOL
Price per DLZR (in USD)$0.00000235
Formula: price = SOL / DLZR at the current pool ratio.
👔 Buyer Enters (1 SOL)
A buyer invests 1 SOL (10% of the SOL side).
You might expect: “They get 85M DLZR (1/10 of supply).”
But in an AMM, the ratio changes. The buyer actually receives ≈ (example) DLZR.
New SOL in pool11 SOL
DLZR remaining(example) DLZR
New price (SOL)0.000000014235 SOL
New price (USD)$0.00000285
🚀 Price Growth Examples
1) After 750M DLZR are bought
DLZR left in LP100,000,000
SOL now in LP85 SOL
New price (SOL)0.000000850 SOL
Increase vs. launch≈ 72.25×
This matches the intuition: fewer DLZR in the pool ⇒ each DLZR is worth more SOL.
2) If only 10,000 DLZR remain
SOL now in LP850,000 SOL
Each DLZR85.00 SOL
USD (at $200/SOL)$17,000
Extreme case to illustrate ratio-based pricing (ignores fees and slippage per-trade).
📘 Key Lesson
- LP price is not fixed to USD — it’s set by the ratio of SOL and DLZR in the pool.
- The fewer DLZR left, the more expensive each DLZR becomes (in SOL and therefore USD).
- Early buyers get millions of tokens; late buyers pay more per token.
Model: constant‑product AMM (x·y=k), with examples ignoring trading fees and external price impact for simplicity.