Ticks

Overview of how Ticks work on Duality

Ticks are the fundamental unit of accounting within the dex. Each tick is an integer between 352437 and -352437. All tradeable liquidity, in the form of either `PoolReserves` or `LimitOrderTranche`s is stored at a specific tick. The price of liquidity being stored at tick is determined by the function:

$$p(i) = 1.0001^{i}$$

Some examples:

• Price of tick $0:$ $p(0) = 1.0001^0 = 1$

• Price of tick $4000$ : $p(4000) = 1.0001^{4000} \approx 1.4917$​

• Price of tick $-4000$ : ​$p(-4000) = 1.0001^{-4000} \approx 0.6703$

More specifically price refers to the rate at which Token1 can be converted to Token0. Logically, the converse rate for converting Token0 to Token1 can be expressed as:

$$price0To1(i) = 1/1.0001^{i}$$