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Automated Market Maker


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It is a type of decentralized exchange (DEX) protocol that relies on the mathematical formula to set the price for the assets. This formula is the replacement of order books in traditional exchanges where the price of the assets is determined by pricing algorithms.

The Formula can vary for each of the Protocols. For Example, in the DeFi Protocol, Uniswap uses x*y = K, where the term x denotes the amount of one token and y represents the amount of other tokens in the liquidity pool.

This Automated Market Makers (AMM) is a part of the Decentralized Finance (DeFi) Ecosystem and plays a significant role in improvising the DeFi Space

Know more at : What is Automated Market Maker (AMM)?

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