What Role Does a DEX's Automated Market Maker (AMM) Play in an IDO? ▴ Learn

What Role Does a DEX’s Automated Market Maker (AMM) Play in an IDO?

The Automated Market Maker (AMM) is the core mechanism of a Decentralized Exchange (DEX) that facilitates trading without traditional order books. In an IDO, the AMM is used to create the initial liquidity pool for the newly launched token.

The AMM's smart contracts govern the token price based on the ratio of assets in the pool, ensuring immediate and continuous trading capability once the sale concludes.

What Is the Primary Risk of an Initial DEX Offering (IDO)?

What Is the Difference between an Order Book DEX and an AMM-based DEX?

How Does the ‘Fee Structure’ Differ between a Centralized Exchange (CEX) and a Decentralized Exchange (DEX) AMM?

How Does an AMM Differ from a Centralized Exchange (CEX)?