So, for the purposes of this example let’s assume 1 ETH = 100 AVAX & 100 AVAX = 1 ETH. The farmer provides liquidity on an AMM and deposits 100 AVAX and 1 ETH and receives the ‘receipt’ (LP) token which can then be deposited on Yield Yak to auto-compound. In the event that the price of AVAX starts to increase as more and more people are purchasing AVAX. In this event, the pool adjusts the ratio to ensure the value remains split 50:50 across AVAX and ETH.