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What Is an Automated Market Maker (AMM) in the Context of a DEX?

An AMM is a DEX protocol that uses a mathematical formula and liquidity pools to price assets, replacing a traditional order book.
Greeks.Live29.10.25

What Is an Automated Market Maker (AMM) in the Context of a DEX?

An Automated Market Maker (AMM) is a type of decentralized exchange protocol that uses a mathematical formula (often x y = k) and liquidity pools instead of a traditional order book to determine asset prices and facilitate trades. Liquidity providers supply the asset pairs to the pool, and the AMM's algorithm automatically adjusts the price based on the ratio of assets remaining in the pool after each trade.

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What Is an Automated Market Maker (AMM) and How Does It Function in DeFi?

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