FAQ
What is Automated Market Maker?
An automated market maker - is a type of decentralized exchange where trading is facilitated by liquidity pools, instead of using traditional buyer/seller markets and orderbooks.
Anyone can create a trading pair (pool) or add liquidity to existing pair.
Liquidity providers earn commissions from each trade inside pool of two assets depends of their share in pool.
Quote of the pair is calculated by reserves of each asset in the pool (From the constant product formula it follows that the price of that token A is simply price_token_A = reserve_token_B / reserve token_A).
It enables permissionless automated decentralized exchanges. It's trully innovative idea, which launched the entire DeFi market.
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