What Is the Difference between an AMM and a Central Limit Order Book (CLOB)?

A CLOB matches buyers and sellers based on specific limit and market orders, requiring a counterparty for every trade. An AMM uses a liquidity pool and a smart contract algorithm to facilitate trades, where users trade directly against the pool.

CLOBs are common in traditional exchanges and rely on market makers; AMMs are decentralized and rely on liquidity providers.