Why low-impact stablecoin pricing can disappear on a large trade

A stable-asset curve can be locally flat around a balanced state while becoming much less favorable as the trade moves reserves away from that region. A small quote near parity therefore does not establish capacity for a much larger conversion.

Read the changing slope

Consider hypothetical same-state quotes: 100 input returns 99.98 output, 10,000 returns 9,990, and 100,000 returns 94,000. These illustrative values show increasing average deterioration with size. They are not generated from a specific live pool or a universal stable-swap formula.

The extra 90,000 input between the last two rows produces 84,010 output, an incremental rate of about 0.933444. That added portion is materially worse than the smallest trade's 0.9998 rate.

Stable pricing still depends on inventory

Balancer's stable math documentation identifies balances, amplification and swap amount as inputs to pricing. The near-parity behavior is conditional on those inputs, rather than a promise to exchange unlimited quantities at par.

Pool-specific fee behavior can also contribute to deterioration. Distinguish the invariant's response from any explicit fee change where the quote exposes enough detail.

Check size-specific capacity

Use an actual quote for the intended amount and a small set of neighboring sizes. Do not multiply a 100-unit quote by 1,000 to estimate a 100,000-unit trade. Record direction because draining the scarcer asset can behave differently from replenishing it.

If a comparison reports stable-pool depth within a cost limit, define the benchmark and whether fees are included. A 0.1% gap from nominal parity is not the same as a 0.1% gap from current relative market value. The useful result is a capacity at a specified state and constraint, not a general claim that stablecoin swaps have negligible impact.