What Is An Automated Market Maker (AMM)?

What is an AMM exchange?

  • Order books and buyers/sellers are replaced with crowdsourced liquidity pools.
  • When purchasing cryptocurrency, an algorithm ensures that everyone pays the same price.
  • Incentivize users to deposit crypto assets in liquidity pools through a technique known as yield farming.
  • To provide everyone trading with the pool a consistent price, AMMs use an algorithm resembling x * y = k.
  • Swap assets among traders. Smart contracts are used to automatically pool liquidity.

How did AMM Exchanges Begin?

How does an AMM DEX Work?

AMM Downsides

High slippage

Impermanent loss

Smart Contract Risk

AMM Advantages

Decentralized trading

Market efficiency

Deep liquidity

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EmiSwap

EmiSwap

The first decentralized AMM exchange with NFTs and ESW governance token that compensates 100% gas on Ethereum and distributes 100% of trading fees