Intermediate

AMM and DEX

Intermediate Track 03
๐Ÿ’ฑ

An Exchange Without an Order Book

Centralized exchanges match buy and sell orders.
AMMs enable 24/7 automated trading with a single mathematical formula.

What you'll learn in this module

  • โ†’ How the x ร— y = k constant product formula automatically determines prices
  • โ†’ Liquidity pools and LP tokens, price impact and impermanent loss
  • โ†’ Comparing DEX ecosystems: UniswapยทCurveยทBalancerยทSushiSwap
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x ร— y = k

The product of two assets is always constant. Buying one makes the other more expensive.

๐Ÿ’ง
Liquidity Pool

LPs deposit two tokens. Earn a proportional 0.3% fee on every trade.

๐Ÿ“ˆ
Automatic Price Discovery

The formula automatically adjusts prices based on supply and demand. No intermediary needed.