What Are the Key Differences between a Constant Product AMM and a Dynamic Order Book?

A Constant Product AMM (e.g. Uniswap v2) uses a fixed mathematical formula (x y=k) to determine asset prices and liquidity, requiring no external market makers or order matching.

A Dynamic Order Book (e.g. a CEX or some DEXs) relies on buyers and sellers placing specific limit orders, and the price is determined by the intersection of supply and demand. AMMs offer continuous liquidity but are prone to high slippage; order books offer better price discovery but require high liquidity.