What are the Automated market makers (AMMs)? Back to list

Member SinceJan 16, 2023

Posts 51


Feb 24, 2023 at 22:26
Automated market makers (AMMs) are decentralized finance (DeFi) protocols that allow traders to buy and sell cryptocurrencies without the need for traditional order books. Instead, AMMs use algorithms to determine asset prices based on the ratio of tokens held in a liquidity pool. Users can contribute liquidity to the pool by depositing their cryptocurrencies in exchange for a share of the pool's trading fees. AMMs typically charge a small fee for every trade, which is then distributed to liquidity providers based on their share of the pool. AMMs are becoming increasingly popular due to their ease of use, lower fees, and ability to facilitate trades 24/7 without the need for intermediaries.

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