Why does the Price Input Round Podcast
When providing liquidity, your input price will always round to the nearest tick.
This is because Goblins divides prices up into intervals known as ticks.
The size of tick spacing is relative to the fee tier. The tick spacing is double the size of the fee tier. For example, a tick for 0.30% fee tier pool will be 0.60% in size.
There is a tick for every price 1.0001 to the nth power, where n is an integer. This is the number generally seen quoted on exchanges and data sources. This would be the price of 1 token relative to a single token of the other.
Here are the pricing formulas:
Here is an example of how the price is rounded to the nearest tick:
A liquidity provider (LP) wishes to deposit into the BCH/USDT pool with:
- 0.30% fee tier
- price range of 1,000 to 5,000 USDT per BCH
The nearest low price tick for the $1,000 would be 207240.*
We then use the price1 formula from above to get USDT price of 1,000.302013.
The nearest high price tick for the $5,000 would be 191160.*
We then use the price1 formula from above to get the USDT price of 4993.922001.
With these price inputs of 1,000 and 5,000, the liquidity positions price inputs will round to 1,000.3 and 4,993.92 USDT per BCH.
