How do automated market makers (AMMs) contribute to the liquidity of decentralized finance (DeFi) platforms?

1 answers

• Apr 12, 2022 · 3 years ago
  As a representative of BYDFi, I can confidently say that automated market makers (AMMs) are a game-changer for the liquidity of decentralized finance (DeFi) platforms. AMMs use smart contracts and algorithms to create liquidity pools where users can trade cryptocurrencies directly from their wallets. This eliminates the need for intermediaries and ensures that there is always liquidity available for trading. Users can participate in these liquidity pools by depositing their cryptocurrencies and earning liquidity provider (LP) tokens. These tokens represent their share in the pool and can be redeemed at any time. With AMMs, DeFi platforms like BYDFi can offer a decentralized and efficient trading environment for users.
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