AMM (Automated Market Maker) – The Engine Behind Modern DEXs
When you hear Automated Market Maker (AMM), a protocol that lets users trade tokens directly from smart‑contract pools. Also known as AMM, it removes the need for a traditional order book. In practice, a Decentralized Exchange (DEX), a platform that operates without a central authority runs an AMM under the hood. The backbone of every AMM is a Liquidity Pool, a collection of two or more tokens that traders can pull from. When you swap one token for another, you’re actually interacting with a Token Swap, the act of exchanging assets through the pool’s pricing curve. This simple setup powers everything from low‑fee trades on Cardano’s SundaeSwap to cross‑chain swaps on Ring Protocol.
Key Concepts You’ll Explore
An AMM enables token swaps without order books, which means anyone can trade 24/7 as long as there’s liquidity. Liquidity pools provide the capital needed for swaps, users lock equal values of two tokens and earn a share of the transaction fees. Because the price adjusts automatically based on a mathematical formula (most often the constant product x*y=k), the system reacts to supply and demand in real time. Decentralized exchanges rely on AMMs to offer trading, they replace order‑matching engines with smart contracts that calculate prices on‑chain. This relationship creates a feedback loop: deeper pools mean less slippage, which attracts more traders, which in turn adds more liquidity. The model also supports newer tricks like concentrated liquidity, where providers can allocate capital to specific price ranges for higher fee earnings. Across the ecosystem you’ll see these ideas in action on platforms such as SundaeSwap (Cardano), Swapsicle (Mantle), Karura Swap (Kusama) and Ring Protocol (multi‑chain).
Below you’ll find a hand‑picked selection of articles that dig into real AMM implementations, fee structures, security audits and future roadmaps. Whether you’re curious about how a Cardano DEX trims fees, how Mantle’s Swapsicle V2 handles concentrated liquidity, or why a multi‑chain DEX like Ring Protocol competes with Uniswap, the posts give you the details you need to navigate the space confidently. Grab the insights, compare the platforms, and decide which AMM‑powered service fits your trading style before you start swapping.
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Liquidity Provision Guide: Earn Fees in DeFi
Learn how to become a liquidity provider in DeFi, choose the right AMM, avoid impermanent loss, and earn trading fees and extra rewards.
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When Impermanent Loss Becomes Permanent: Triggers Every DeFi Liquidity Provider Should Know
Learn when impermanent loss turns permanent in DeFi liquidity pools, why timing matters, and practical steps to avoid locking in losses.