Effective Depth

Effective Depth is the central liquidity metric for Multiswap.

Effective Depth = max trade size at X bps average price impact

The most useful thresholds are:

• ED_10bps
• ED_50bps
• ED_100bps

The capital productivity ratio is:

Liquidity Efficiency = Effective Depth / Total Pool Scale

Why the metric matters

Traders experience liquidity through execution. Issuers experience liquidity through secondary market quality. Ecosystems experience liquidity through the cost of supporting useful markets.

Effective Depth connects all three.

Pair Effective Depth

Pair Effective Depth measures a specific trade path.

Pair Effective Depth = max pay-side trade size at X bps for A -> B

The limiting factor is often the smaller relevant scale asset. A useful rule of thumb for stableness = 10 in balanced conditions is:

low-impact trade scale ≈ 50% of the smaller relevant reserve scale

This gives teams a practical liquidity planning rule:

limiting asset scale ≈ 2 × target low-impact trade size

Basket Effective Depth

Basket Effective Depth measures a receive basket.

Basket Effective Depth = max pay-side trade size at X bps
when receive value is split across multiple assets

This metric is native to Multiswap. Pairwise AMMs focus on one receive asset. Multiswap can deliver value across a basket.

Benchmark design

A credible benchmark table includes:

Venue	Pair or basket	Pool scale	Direction	ED 10 bps	ED 50 bps	ED 100 bps	ED / scale

The live proof phase should publish this table for real pool states.