A protocol that enables token swaps using algorithmic pricing against pooled liquidity instead of matching individual buyers and sellers. AMMs use mathematical formulas (typically constant product x*y=k) to determine prices based on the ratio of tokens in a liquidity pool. On Solana, major AMMs include Raydium, Orca, and Meteora.
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A protocol that enables token swaps using algorithmic pricing against pooled liquidity instead of matching individual buyers and sellers. AMMs use mathematical formulas (typically constant product x*y=k) to determine prices based on the ratio of tokens in a liquidity pool. On Solana, major AMMs include Raydium, Orca, and Meteora.
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Think of it as the pricing engine that lets users swap assets against liquidity in a pool instead of matching against a live order book.
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AMMs, routing, liquidity, lending, and trading infrastructure.
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AMM (Automated Market Maker) (amm) Category: DeFi Definition: A protocol that enables token swaps using algorithmic pricing against pooled liquidity instead of matching individual buyers and sellers. AMMs use mathematical formulas (typically constant product x*y=k) to determine prices based on the ratio of tokens in a liquidity pool. On Solana, major AMMs include Raydium, Orca, and Meteora. Aliases: AMM Related: Liquidity Pool, Swap, Constant Product Formula (x*y=k)
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A smart-contract-held reserve of two or more tokens that enables trading via an AMM. Users deposit token pairs in specified ratios to become liquidity providers and earn trading fees. Pools are identified by their token pair and fee tier. Pool depth (total value locked) determines price impact for trades.
The exchange of one token for another through a DEX, either via an AMM pool or an order book. The user specifies an input token/amount and receives output tokens at the current market rate minus slippage and fees. On Solana, swaps settle in a single transaction (~400ms) with fees typically 0.01-0.3% per trade.
The AMM pricing formula x * y = k, where x and y are the reserve quantities of two tokens and k is a constant. As one token is bought, its reserve decreases and price increases, following a hyperbolic curve. This ensures the pool never runs out of either token but causes increasing slippage for larger trades.
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An AMM that uses virtual (synthetic) reserves to facilitate perpetual contract trading without requiring real token liquidity in a pool. Traders deposit collateral and trade against the virtual reserves, with the AMM formula determining entry and exit prices. Drift Protocol on Solana uses a virtual AMM as a backstop liquidity source alongside its decentralized limit order book.
An AMM design where liquidity providers concentrate their capital within specific price ranges instead of across the full 0-to-infinity range. CLMMs dramatically improve capital efficiency—LPs earn more fees per dollar deposited within their active range. If the price moves outside the range, the position becomes inactive. Orca Whirlpools and Raydium CLMM are leading implementations on Solana.
The simplest and most widely used AMM model, based on the formula x * y = k where x and y are token reserves and k is an invariant. Every swap changes the ratio of reserves while keeping the product constant, producing a hyperbolic price curve. CPMMs provide liquidity across the full price range (0 to infinity) but are less capital-efficient than concentrated liquidity designs. Raydium's standard pools use this model.
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A smart-contract-held reserve of two or more tokens that enables trading via an AMM. Users deposit token pairs in specified ratios to become liquidity providers and earn trading fees. Pools are identified by their token pair and fee tier. Pool depth (total value locked) determines price impact for trades.
The exchange of one token for another through a DEX, either via an AMM pool or an order book. The user specifies an input token/amount and receives output tokens at the current market rate minus slippage and fees. On Solana, swaps settle in a single transaction (~400ms) with fees typically 0.01-0.3% per trade.
The AMM pricing formula x * y = k, where x and y are the reserve quantities of two tokens and k is a constant. As one token is bought, its reserve decreases and price increases, following a hyperbolic curve. This ensures the pool never runs out of either token but causes increasing slippage for larger trades.
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An AMM design where liquidity providers concentrate their capital within specific price ranges instead of across the full 0-to-infinity range. CLMMs dramatically improve capital efficiency—LPs earn more fees per dollar deposited within their active range. If the price moves outside the range, the position becomes inactive. Orca Whirlpools and Raydium CLMM are leading implementations on Solana.
A smart-contract-held reserve of two or more tokens that enables trading via an AMM. Users deposit token pairs in specified ratios to become liquidity providers and earn trading fees. Pools are identified by their token pair and fee tier. Pool depth (total value locked) determines price impact for trades.
A token issued to liquidity providers representing their proportional share of a pool's reserves and accrued fees. LP tokens can be burned to withdraw the underlying assets. The value of LP tokens changes as the pool's token ratios shift and fees accumulate. LP tokens are often stakeable in yield farming programs for additional rewards.
The exchange of one token for another through a DEX, either via an AMM pool or an order book. The user specifies an input token/amount and receives output tokens at the current market rate minus slippage and fees. On Solana, swaps settle in a single transaction (~400ms) with fees typically 0.01-0.3% per trade.