Unbalanced liquidity affects prices
Jeiwan opened this issue Β· comments
Hello π
The mint
function in UniswapV2Pair
allows to deposit unbalanced amounts of tokens. I.e., if current ratio of reserves is 1:1, nothing forbids depositing amounts in ratio 1:2. To properly calculate the amount of LP tokens issued in such situations, Math.min
is used:
v2-core/contracts/UniswapV2Pair.sol
Line 123 in 4dd5906
However, both deposited amounts are then saved to reserves:
v2-core/contracts/UniswapV2Pair.sol
Line 128 in 4dd5906
v2-core/contracts/UniswapV2Pair.sol
Lines 82 to 83 in 4dd5906
As a result, prices get changed. Is this intentional? I have always thought that prices can only be changed via trading.
It also looks like that due to the Math.min
usage, total amount LP tokens doesn't reflect reserves. Why not taking an average of amount0.mul(_totalSupply) / _reserve0, amount1.mul(_totalSupply) / _reserve1
?
Yes it is intentional, you can also make a swap without transferring a pair token.
This is a bug as the depositor receives the minimum amount of LP tokens and the Pair keeps the change. So, if we had a pair where reserve0 == reserve1
, I could deposit a small amount of token0
and a large amount of token1
, receive LP tokens based on my token0
amount, and the token1
is stuck in the pair (and can be arb'd back to reserve0 == reserve1
.