AMM (Automated Market Maker)
A decentralized exchange mechanism that prices assets algorithmically using liquidity pools rather than traditional order books.
In-Depth Explanation
AMMs use mathematical formulas (such as x × y = k in constant-product pools) to price trades automatically without requiring centralized market makers.
Practical Market Example
Real-World Application
Uniswap uses an AMM model allowing users to trade tokens instantly against pooled smart contract reserves.