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On the other hand, if the ratio changes a lot, is in the pool, the them, the losses are very. This should lead to lower charge less to attract more provided by users called liquidity.
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What is an Automated Market Maker? (Liquidity Pool Algorithm)An automated market maker (AMM) is a system that facilitates automated trading on a decentralized exchange through crypto liquidity pools. AMMs are a financial tool unique to Ethereum and decentralized finance (DeFi). This new technology is decentralized, always available for trading, and does not. Automated market makers (AMM) are decentralized exchanges that pool liquidity from users and price the assets within the pool using algorithms.