Automated Market Maker (AMM)
An AMM is a DEX design that prices trades with a mathematical formula against a liquidity pool instead of matching buyers and sellers.
In depth
The classic formula keeps the product of the two token balances constant (x × y = k). Buying token A removes it from the pool, so its price rises automatically. Anyone can trade at any time and anyone can supply liquidity — no order book needed.
Why it matters
AMMs made permissionless trading possible and are the mechanism behind most DEX prices.