AMMs Explained: How Automated Market Makers Price Tokens

Most people first encounter decentralized finance through a simple swap on Uniswap or a similar platform. They select one token, confirm the transaction, and receive another — nearly instantly, wit...

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AMMs Explained: How Automated Market Makers Price Tokens

Source: be1crypto.com

Most people first encounter decentralized finance through a simple swap on Uniswap or a similar platform. They select one token, confirm the transaction, and receive another — nearly instantly, without any visible counterparty. What makes this possible is the Automated Market Maker, or AMM. Understanding how these systems price tokens reveals why decentralized exchanges have…