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AMM (Automated Market Maker)

A DEX mechanism that prices assets using mathematical formulas and liquidity pools, not order books.

In depth

Most use constant-product formula (x*y=k pioneered by Uniswap). Liquidity providers deposit token pairs, earn fees, but face "impermanent loss" if pool ratio shifts. Curve's stableswap optimizes for low-slippage stablecoin swaps.

Frequently asked about AMM (Automated Market Maker)

What is AMM (Automated Market Maker)?

A DEX mechanism that prices assets using mathematical formulas and liquidity pools, not order books. Most use constant-product formula (x*y=k pioneered by Uniswap). Liquidity providers deposit token pairs, earn fees, but face "impermanent loss" if pool ratio shifts. Curve's stableswap optimizes for low-slippage stablecoin swaps.

Why does AMM (Automated Market Maker) matter for investors?

In crypto, AMM (Automated Market Maker) is one of the building blocks investors use to compare opportunities and assess risk. Understanding it helps you read research notes, earnings reports, and market commentary without getting lost in jargon.

How is AMM (Automated Market Maker) used in practice?

Most use constant-product formula (x*y=k pioneered by Uniswap). Liquidity providers deposit token pairs, earn fees, but face "impermanent loss" if pool ratio shifts.

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