Course Content
What Is an Automated Market Maker (AMM)?
You could think of an automated market maker as a robot that’s always willing to quote you a price between two assets. Some use a simple formula like Uniswap, while Curve, Balancer and others use more complicated ones. Not only can you trade trustlessly using an AMM, but you can also become the house by providing liquidity to a liquidity pool. This allows essentially anyone to become a market maker on an exchange and earn fees for providing liquidity. AMMs have really carved out their niche in the DeFi space due to how simple and easy they are to use. Decentralizing market making this way is intrinsic to the vision of crypto.
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Introduction
What is an automated market maker (AMM)?
How does an automated market maker (AMM) work?
What is a liquidity pool?
What is impermanent loss?
Closing thoughts
What Is an Automated Market Maker (AMM)?
About Lesson

Automated market makers are a staple of the DeFi space. They enable essentially anyone to create markets seamlessly and efficiently. While they do have their limitations compared to order book exchanges, the overall innovation they bring to crypto is invaluable.

AMMs are still in their infancy. The AMMs we know and use today like Uniswap, Curve, and PancakeSwap are elegant in design, but quite limited in features. There are likely many more innovative AMM designs coming in the future. This should lead to lower fees, less friction, and ultimately better liquidity for every DeFi user.
Still got questions about DeFi and automated market making? Check out our Q&A platform, Ask Academy, where the Binance community will answer your questions.
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