Much of crypto trading activity takes place on a type of decentralized exchange known as a DEX. While many exchanges still rely on human traders to carry out market-making functions, on a DEX, this activity is handled by a DEX protocol called an (AMM), which stands for “automated market maker.” A DEX-based AMM utilizes a mathematical formula known as an algorithm to price assets. (AMM) is a decentralized exchange (DEX) protocol that relies on a mathematical formula to price assets. Instead of using an order book like a traditional exchange, assets are priced according to a pricing algorithm. These pricing Algorithms are constantly changing and evolving to account for changing market conditions across the vast crypto trading landscape.
NFT Term
AMM (Automated market maker)
Definition of AMM (Automated market maker) from the NFTguild.com glossary.
