In Figure 1, a trader is swapping $AAA token for $BBB tokens. The trader sends 100 $AAA tokens to the AMM. A 0.3% fee is applied and 0.3 $AAA tokens are not included in the swap. The remaining 99.7 $AAA tokens are swapped in the AMM to $BBB tokens. Since the AMM will be losing $BBB tokens, it must gain $AAA tokens to keep k constant.