An Automated Market Maker uses software to match buy and sell orders automatically without a centralizedAn organizational structure wherein a small handful of actors have control over the entire network. Centralized in the context of... Read More exchangeAn exchange is a marketplace where traders can buy and sell cryptocurrencies and other digital assets. The "exchange" acts as... Read More. AMMs do not require an order book and usually do not use traditional currency pairs. Instead, each trade involves two “tokens” swapped for each other at a price set by the AMM’s algorithms. AMMs typically have lower fees than traditional exchanges, making them attractive to traders who want to minimize costs.
