What Is An AMM?

What is an automated market maker?

What Are Automated Market Makers

Automated market makers (AMM) are protocols used on decentralized exchanges that utilize a mathematical formula to price an asset like cryptocurrency.

Order book

How Does Automated Market Making Affect Decentralized Exchanges

When trading, you tend to get a trading pair, for example, SOL/BNB; on centralized exchanges, you’d require a counterparty (another trader) to take the opposite side of your trade to provide the liquidity.

A Basic Understanding of How Liquidity Pools Work

Liquidity pools are great for ensuring constant buyers and sellers of a particular asset such as Parcl assets.

Conclusion

Real estate is considered a fairly illiquid market as there’s no guarantee of buyers or sellers. Parcl uses AMM liquidity pools to incentivize people to provide liquidity in return for a reward fee. For the first time, we can now consider Real Estate as a liquid market, or at least the way we do it makes it liquid.

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