#DeFiBreakdown #1: #MM vs #AMM debate.
01 Jul 2022, 08:18
#DeFiBreakdown #1: #MM vs #AMM debate😉
While Market Maker (MM) facilitates the exchange within conventional financial systems, Automated Market Maker (AMM) is the core infrastructure for the #DeFi economy.
Let's see the nuance each of them contributes to the market growth! 👇
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Directly get involved to facilitate the exchange between buyers & sellers, that's MM's job! 😀
#AMM works much differently! You could think of an AMM as an AUTO market that allows u to use P2P transactions without any third-party interference.
Any other fundamental differences?🤔
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Look at the way they execute the trade & earn profits to find out what else sets them apart!
MM earns from the difference between the bid price and the ask price.
But AMM doesn't yield returns for itself yet Liquidity Providers (LPs), who contribute to liquidity pools so deserve rewards 💸
$LUA #LuaSwap
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