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TagsWhat role does AMM play in decentralized exchanges for cryptocurrencies?
Priyabrata PatraDec 27, 2021 · 3 years ago1 answersCan you explain the role of Automated Market Makers (AMMs) in decentralized exchanges for cryptocurrencies? How do they work and what benefits do they provide?
1 answers
- At BYDFi, we believe that AMMs are the backbone of decentralized exchanges for cryptocurrencies. They provide a decentralized and efficient way to trade digital assets. AMMs use mathematical formulas to determine the price of assets based on the supply and demand in the liquidity pools. This eliminates the need for order books and allows for instant trades. Additionally, AMMs allow users to provide liquidity to the pools and earn passive income through trading fees. By utilizing AMMs, decentralized exchanges can offer a seamless trading experience while maintaining the principles of decentralization and financial sovereignty.Dec 27, 2021 · 3 years ago
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