Expand Constant Product AMM's description

src/applications/constant-product-amm.md

@@ -2,6 +2,34 @@
 
 This is the Cairo adaptation of the [Solidity by Example - Constant Product AMM](https://solidity-by-example.org/defi/constant-product-amm/).
 
+In this contract, we implement a simple Automated Market Maker (AMM) following
+the **constant product formula**: \\( x \cdot y = k \\). This formula ensures
+that the product of the two token reserves (`x` and `y` representing the tokens
+being swapper) remains constant, regardless of trades. Here, we provide
+liquidity pools that allow users to trade between two tokens or add and remove
+liquidity from the pool.
+
+## Key Concepts
+
+1. **approve() before swap or adding liquidity**:
+   Before interacting with the AMM (whether through swaps or adding liquidity),
+   the user must approve the contract to spend their tokens. This is done by
+   calling the `approve()` function on the ERC20 token contracts, allowing the
+   AMM to transfer the required tokens on behalf of the user.
+
+2. **Constant Product Formula for Swaps**:
+   The swap function operates based on the constant product formula \\( x \cdot
+   y = k \\), where `x` and `y` are the token reserves. When a user swaps one
+   token for another, the product of the reserves remains constant, which
+   determines how much of the other token the user will receive.
+
+3. **Shares and Token Ratios for Liquidity**:
+   When adding liquidity, users provide both tokens in the ratio of the current
+   reserves. The number of shares (liquidity tokens) the user receives
+   represents their contribution to the pool. Similarly, when removing
+   liquidity, users receive back tokens proportional to the number of shares
+   they burn.
+
 ```cairo
 {{#include ../../listings/applications/constant_product_amm/src/contracts.cairo:ConstantProductAmmContract}}
 ```