An algorithm used in decentralized trading platforms (DEXDEX A decentralized exchange platform without a central authority, often using AMMs to enable trades.) to provide liquidityLiquidity The ease with which an asset can be bought or sold without affecting its price. using pools. Liquidity providers deposit into these pools and receive a share of the fees generated by transactions. The algorithm determines the assetAsset Any digital asset, including cryptocurrencies. price based on supply and demand in the pool.
