Automated Market Maker Meaning and Definition | Define What is Automated Market Maker

Automated Market Maker

An Automated Market Maker (AMM) is a decentralized system that facilitates trading on cryptocurrency exchanges by providing liquidity through crypto liquidity pools. Unlike traditional exchanges, AMMs do not rely on order books or market makers to match buyers and sellers.

Instead, they use smart contracts to define the price of digital assets and provide liquidity, allowing users to trade directly with the liquidity pool. AMMs incentivize users to become liquidity providers by offering a share of transaction fees and free tokens. This approach enables 24/7 trading, eliminates the need for intermediaries, and promotes autonomy in the crypto space. Popular AMMs include Uniswap, Balancer, and Curve, each with its approach to liquidity provision and pricing mechanisms.

More Terms:

Affiliate Program

Crypto affiliate programs offer individuals the opportunity to earn commissions by promoting cryptocurrency products and services through referral links. These programs, such as those offered by Uphold, Binance, Eightcap, and SwissBorg, provide affiliates with commissions for referring customers to cryptocurrency platforms.

Airdrop

A crypto airdrop is a promotional strategy used by blockchain startups to distribute tokens or coins to specific wallet addresses, aiming to raise awareness and increase ownership of a new cryptocurrency.

Algorithmic Peg

Algorithmic peg in the realm of cryptocurrencies refers to the mechanism used by algorithmic stablecoins to maintain a stable value, typically pegged to a fiat currency like the US dollar.

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Plena Finance integrates Automated Market Maker (AMM) technology within its Super App, enabling users to seamlessly interact with popular AMMs like Uniswap. Through the Plena Super App, users can access and trade a wide range of cryptocurrencies directly, benefiting from the continuous liquidity and efficient pricing mechanisms that AMMs provide. This integration allows users to easily swap tokens, provide liquidity to earn fees, and take advantage of yield farming opportunities, all within a single, user-friendly interface.