# How does a THORChain liquidity pool price a swap?

A THORChain liquidity pool sets the price of a swap from the balances in the pool. The bigger the trade compared with the pool, the larger the slip, and that slip is the fee paid to liquidity providers.

Also called liquidity pools or continuous liquidity pool.

## How a swap is priced

Each pool holds two balances, one of RUNE and one of another coin. The coins you send are added to one side, and the coins you receive come out of the other side.

Before any fee, the product of the two balances stays the same, so a bigger trade moves the price further.

## Slip and the fee

Slip is how far the output falls short of the price the balances suggest, as a share of that price. The fee is that same share applied to the output, so the trader receives the output less the fee.

For example, in a pool with 1,000 units of each side, a trade of 100 units returns about 82.6 units. The balances alone would suggest 100, so the trade gives up about 17 units to slip and the fee.

## Who receives the fee

The slip fee goes to liquidity providers, and each one receives a share in proportion to its part of the pool. A large trade can be split into smaller streaming swaps, which lowers the slip on each piece.

## Related terms

- [Native cross-chain swap](https://redacted.gg/glossary/cross-chain-swap.md): A native cross-chain swap trades a coin on one chain for a coin on another, for example Bitcoin for Ether, by moving the real coins between vaults instead of minting wrapped copies on a bridge.
- [RUNE](https://redacted.gg/glossary/rune.md): RUNE is THORChain’s native asset. Node operators bond it to take part in the network, and it sits on one side of every pool of liquidity, so a swap from Bitcoin to Ether runs from BTC to RUNE to ETH in one flow.
- [THORChain](https://redacted.gg/glossary/thorchain.md): THORChain is a network that swaps native coins across chains, such as Bitcoin for Ether, with no bridges and no wrapped tokens. The coins sit in vaults on their home chains, secured by about 100 independent node operators.
- [Streaming swap](https://redacted.gg/glossary/streaming-swap.md): A streaming swap cuts one large swap into smaller sub-swaps that run over several blocks, so each piece moves the price less. You choose the interval between pieces and how many pieces there are.
- [Orderbook](https://redacted.gg/glossary/orderbook.md): An orderbook lists every open order to buy or sell at a set price. A limit order waits on the book until the market reaches its price, instead of trading at whatever the price is right now.

Sources: [Continuous liquidity pools, THORChain documentation](https://docs.thorchain.org/thorchain-finance/continuous-liquidity-pools)
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Page: https://redacted.gg/glossary/liquidity-pool/