An Automated Market Maker (AMM) is a smart contract protocol that enables decentralized trading by automatically setting prices and facilitating token swaps. Instead of relying on traditional order books, AMMs use liquidity pools and mathematical formulas to determine prices.
AMMs are a core innovation in decentralized finance (DeFi), allowing anyone to become a liquidity provider and earn fees by supplying tokens to a pool. Popular AMMs include Uniswap, Balancer, and Curve.
