How does a THORChain liquidity pool price a swap?

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 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.

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.