What is Decentralised exchange, automated market maker, liquidity pool?

A decentralised exchange is a trading venue implemented as smart contracts on a blockchain, on which users trade from their own wallets and every trade settles on chain. An automated market maker is a decentralised exchange whose prices are set by a formula applied to the balances of a liquidity pool: a contract holding reserves of two or more tokens, deposited by liquidity providers who receive a claim on them and on the fees.