What is AMM (Automated Market Maker)?

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An **Automated Market Maker (AMM)** is a type of decentralized exchange (DEX) protocol that uses a mathematical formula, rather than a traditional order book, to automatically price assets and provide liquidity for trading digital assets on a blockchain. AMMs are foundational to decentralized finance (DeFi), enabling permissionless trading by relying on liquidity pools funded by users.

AMM (Automated Market Maker)

What is AMM (Automated Market Maker)?

How does an Automated Market Maker (AMM) determine the price of assets and facilitate trades without an order book?

What is impermanent loss, and how does it represent a key risk for liquidity providers in Automated Market Makers (AMMs)?

What are the major types of Automated Market Makers (AMMs), and how have protocols like Uniswap and Curve innovated the model?

Why are Automated Market Makers (AMMs) considered a foundational technology for the decentralized finance (DeFi) ecosystem?

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