Automated Market Maker (AMM)

An Automated Market Maker (AMM) is a protocol used in decentralized exchanges (DEXs) that relies on mathematical formulas to price assets. Unlike traditional order book systems, AMMs utilize liquidity pools funded by users, allowing for automated and permissionless trading. AMMs enable continuous liquidity and facilitate trading without the need for centralized intermediaries, playing a pivotal role in the decentralized finance (DeFi) ecosystem.
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