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added a bit of explanation
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jepidoptera committed Jul 31, 2023
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26 changes: 24 additions & 2 deletions hydradx/notebooks/Omnipool/TestPriceMoveLP.ipynb
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"<H4>Varying the weight of R1</H4>\n",
"In the next experiment, we vary the initial weight of R1 from 0.1% to 10% of the pool, half of which is contributed by a single LP who withdraws at the peak of the price movement. We measure the final price of LRNA as a function of the initial weight of R1 for two cases: a 50% temporary price drop and a 10x price spike."
"In the next experiment, we vary the initial weight of R1 from 0.1% to 10% of the pool, half of which is contributed by a single LP who withdraws at the peak of the price movement. We measure the final price of LRNA as a function of the initial weight of R1 for two cases: a 50% temporary price drop and a 10x price spike.\n",
"\n",
"There is a sweet spot here, because although a higher weight initially increases the effect of the price move, it also means that LRNA price stays more closely tied to TKN price, and this effect eventually dominates, causing LRNA price . For that reason, the peak is found somewhere between the two extremes."
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