I found the exchange on sushi swap or uni swap always changing, if I change 1000 usdt to USDC, the rate is better than changing 10000 usdt, usually if you change more, the rate should be better? Why this different?
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Uniswap and Sushiswap are automated market makers (AMMs)...
usually if you change more, the rate should be better?
...but you are comparing them against conventional exchanges.
Specifically, Uniswap and Sushiswap are a type of AMM - a Constant Product Market Maker. Rather than having an order book like conventional exchanges, they use the following formula:
x * y = k
Where x and y are the two tokens on either side of the exchange, and k is a value that must remain constant. The result of using this formula means that:
"This formula has the desirable property that larger trades (relative to reserves) execute at exponentially worse rates than smaller ones."1
Why is such a property desirable? Because larger trades cause a greater change in the ratio of liquidity between the two tokens - you are taking more liquidity from one of the pools, making this market less efficient - so you pay a higher price.
1https://uniswap.org/docs/v2/protocol-overview/how-uniswap-works/
Richard Horrocks
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