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Quantitative Finance · Glossary

What is Constant-product market maker?

Definition 20.2 Markets III: Commodities, Energy and Crypto · Chapter 20 — Automated Market Makers

A constant-product market maker is an automated market maker whose pool of reserves xx and yy accepts a trade only if xyxy does not decrease, with a fee γfee\gamma_{\mathrm{fee}} taken on the input and left in the pool.

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