Automated Market Maker:
A liquidity pool where the sum of token balances remains constant. The smart contract ensures that every trade maintains the sum of the pool's token balances.
- Constant sum AMM X + Y = K
A liquidity pool where the product of token balances remains constant. This AMM model is commonly known as the Uniswap model, where the product of token balances remains constant.
- Constant product AMM XY = K