How Do AMMs Handle Trades for Assets That Do Not Have a Direct Liquidity Pool Pairing?

AMMs handle trades for assets without a direct pairing through a process called routing. The AMM's router will automatically find a path through multiple liquidity pools to complete the trade.

For example, to trade Token A for Token C, the router might first trade Token A for Token B (a common intermediary like ETH or a stablecoin), and then trade Token B for Token C. This process may involve multiple "hops" and can result in higher transaction fees and slippage for the user.