What is an AMM?

Definition of AMM

Alex avatar
Written by Alex
Updated over a week ago

Automated market makers (AMM) are decentralized exchanges that pool liquidity from users and price the assets within the pool using algorithms. By using smart contracts and liquidity pools, the AMMs allow users to swap tokens at higher speeds, without the need for traditional order books. To balance pools between two assets AMMs use a formula (the most widespread is x*y=k).

Did this answer your question?