Key Point #4
Key Point #4:
Note that the FXPool was designed so that even if the LP ratio is at 30:70 and not 50:50, it will still give out FX accurate rates. A common question is "Should I rebalance my FXPool back to 50:50?". The answer is no, because as a pool operator you should instead manage the LP ratios to incentivize organic market activity, rather than jumping in every time your FXPool becomes heavily weighted towards one asset.
Scenario:
If both the FXPool and external pool are heavily weighted towards one side, then this back and forth organic trading and subsequent arbitrage behavior (described in Key Point #2) will stop. Ideally, as a pool operator, you would want the FXPool and external pool to either both be at 50:50 or at "flipped" LP ratios.
Example Seeding Ratios:
50:50
50:50
✅
30:70
70:30
✅
70:30
70:30
❌
20:80
20:80
❌
45:55
55:45
✅
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