> For the complete documentation index, see [llms.txt](https://docs.wombat.exchange/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.wombat.exchange/getting-started/swap.md).

# Swap

Utilizing a stableswap 2.0 model, Wombat users can: swap stablecoins at hyper-efficient exchange rates with minimal slippage.

The swap price is defined by the rate of change in cash of asset x per change in cash of asset y. Defined as:

$$
exchange\ rate = \frac{\partial A\_x}{\partial A\_y} = \frac{1 + \frac{A}{r\_x^2}}{1 + \frac{A}{r\_y^2}}
$$

As you may have noticed, the exchange rate is independent of the number of token x and token y in the pool and depends solely on the **coverage ratio**.

#### Example

Assume $$A$$ = 0.05, $$r\_x$$ = 80% and $$r\_y$$ = 150%. We have

$$
exchange\ rate = \frac{1 + \frac{0.05}{0.8^2}}{1 + \frac{0.05}{1.5^2}} \approx 1.055
$$

If we reverse the direction, swap from token y to token x. We have

$$
exchang\ rate = \frac{1 + \frac{0.05}{1.5^2}}{1 + \frac{0.05}{0.8^2}} \approx 0.95
$$

### Incentives for convergence of coverage ratio

Wombat incentivizes a swap if the coverage ratio of two tokens is converged and penalizes if it diverges, as shown in the above example. It helps keep the pool in a healthy state and prevents a token from being defaulted. Learn more in below guide:

{% content-ref url="/pages/gxeklBix52Xij5cbwGph" %}
[Deposit Gain and Withdrawal Fee](/concepts/fees/deposit-gain-and-withdrawal-fee.md)
{% endcontent-ref %}