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Automated market maker
Also: AMM, AMMs, automated market makers
A DEX design that prices trades using a formula and a pool of tokens instead of an order book.
The classic AMM formula keeps the product of the two token balances constant (x × y = k). Buying one token makes it scarcer in the pool and raises its price. It’s simple and always available, but large trades suffer slippageSlippage The difference between the price you expected and the price your trade actually got..