AMM

Automated Market Makers (AMMs) use pools of digital assets (sourced from so-called ‘liquidity providers’ to enable trading services for its users. Prices are quoted automatically by the underlying smart contract, hence the name automated market maker. The main purpose of creating an AMM is to ensure liquidity at all times. Given the prevalence of the term AMM for AMM-based DEXs, we use the terms interchangeably in the following.