Are you new to the cryptocurrency world and feeling a bit lost? Don't worry, you are not alone. The cryptocurrency space can be daunting for newcomers, with its many terms, abbreviations and definitions that can be difficult to understand.
ATAIX crypto glossary will help make sense of some of the most common cryptocurrency terms and definitions. Armed with this information, you'll be ready to start participating in this exciting and innovative new economy!
- 51% attack
- Accumulation / Distribution Indicator
- Adam Back
- Algorithmic Stablecoin
- All-Time High
- Altcoin Trader
- Angel Investor
- Aroon Indicator
- ASIC-Resistant Coins
- Asset-Backed Tokens
- Atomic Swap
- Automated Market Maker (AMM)
- Average Directional Index (ADX)
What is an Automated Market Maker (AMM)?
Since their invention in the early 1990s, AMM systems have become increasingly popular. Prior to AMM, order books were created by humans who manually initiated trades meant to improve market liquidity. AMM has made it much easier and more efficient to trade assets.
The traditional approach to price discovery and market-making caused some slippage and latency. Furthermore, human market makers were also accused of market manipulation. AMMs solved all these issues by introducing a decentralized system. Now, similar systems are being used in blockchain-based decentralized exchanges.
On decentralized exchanges that use an Automated Market Maker (AMM) model, the traditional order book is replaced by liquidity pools that are pre-funded on-chain for both assets of the trading pair. The liquidity in these pools is provided by other users who earn passive income from their deposits through trading fees, which are based on the percentage of the liquidity pool that they provide.
One popular decentralized exchange that has incorporated an AMM is Uniswap. Uniswap allows its users to supply liquidity to earn passive income or exchange between various assets, all on the Ethereum blockchain. Thanks to using an AMM, Uniswap can provide a unique and efficient trading experience for its users.