Automated Market Maker
An automated market maker (AMM) is a DEX design with no order book: traders swap against a pool of tokens, and a formula (usually `x * y = k`) sets the pri
An automated market maker (AMM) is a DEX design with no order book: traders swap against a pool of tokens, and a formula (usually `x * y = k`) sets the price automatically. Liquidity providers deposit both tokens and earn a cut of every trade.
Why it matters
AMMs (Uniswap pioneered them) made permissionless listing possible — anyone can create a market in seconds, no exchange approval needed. The costs are borne by LPs: impermanent loss, and by traders: slippage in thin pools.