The Constant Product Formula is a mathematical formula used in automated market makers (AMMs) to maintain liquidity in decentralized exchanges. It ensures that the product of the quantities of two assets in a trading pair remains constant, regardless of the trades taking place. Typically, this formula is expressed as ( x times y = k ), where ( x ) is the amount of asset A, ( y ) is the amount of asset B, and ( k ) is a constant. As users trade one asset for another, the quantities of these assets change, but the product ( k ) remains the same. For instance, if a trader buys asset A, the amount of asset A decreases while the amount of asset B increases, keeping the overall product unchanged.This formula creates a liquidity pool that allows for seamless trading without needing an order book. It enables users to swap assets directly with the pool, ensuring that liquidity is always available. The constant product mechanism also helps set prices dynamically based on supply and demand.