Automated market maker (AMM)

A DEX design that prices trades with a formula over a pool of tokens instead of an order book.

In plain English

Large trades against a small pool move the price a lot, so the effective cost depends on pool size as much as on any stated fee.

Example

Buying a large amount of a token from a small pool pushes its price up sharply within the single trade.

Crypto Trading

See also

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