Assume in an xy=k AMM pool with 1 $ETH and 1000 $USDC, when $ETH rises from 1000 USD to 4000 USD, the limited partners will be forced to sell 0.5 $ETH at 2000 USD, so now it is The pool consists of 0.5 $ETH & 2000 $USDC. What if the LP sells $ETH directly for $4000 (e.g. on Binance)? You could do a rebalancing reference strategy where LPs simply buy and sell assets referencing external market prices with deep liquidity. #ETH #crypto2023 #whycrypto