When you trade crypto on a decentralized exchange, there’s no broker, no order book, and no middleman—just AMM crypto, an automated market maker that uses math and liquidity pools to set prices and execute trades. Also known as automated market maker, it’s the engine behind platforms like Uniswap, SushiSwap, and PancakeSwap, letting you swap tokens without waiting for someone else to buy or sell. Unlike traditional exchanges that match buyers and sellers, AMMs rely on algorithms to keep prices stable based on how much of each token is in a liquidity pool, a reserve of two tokens locked in a smart contract that traders draw from. If you swap ETH for USDC, the AMM adjusts the ratio automatically—more ETH sold means ETH gets more expensive in the pool, and vice versa. This system works because people like you and me deposit tokens into these pools to earn fees, turning idle crypto into passive income.
But AMM crypto isn’t perfect. The same liquidity pools that make trading possible also create risks. If one token in the pool drops fast, impermanent loss, the temporary difference between holding tokens vs. providing them to a pool can eat into your returns. And if a token has low trading volume, even small trades can swing prices wildly—this is why you’ll see huge spreads on obscure tokens. Still, AMMs changed everything. They let anyone trade without KYC, without waiting for a counterparty, and without trusting a company to hold their money. That’s why every major DeFi project today builds on AMMs. Even new chains like Solana and Arbitrum use variations of them to power their own DEXs.
What you’ll find in the posts below are real-world examples of how AMM crypto works—both the wins and the warnings. From deep dives into how liquidity pools are exploited by bots, to reviews of DEXs that use AMMs better than others, to breakdowns of tokenomics that make or break a pool’s profitability—you’ll see how this tech plays out in practice. No fluff. Just what you need to know before you swap, stake, or walk away.
SushiSwap V3 (Core) is a decentralized exchange offering low fees, passive income through staking, and advanced tools like limit orders. With $4B locked and strong rewards for users, it’s a top choice for crypto traders who want control and returns.
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