An automated market is a system that facilitates the exchange of assets using algorithms and smart contracts, rather than traditional order books with human intermediaries. These markets, often found in decentralized finance, rely on liquidity pools and mathematical formulas to determine asset prices. They allow for continuous trading and price discovery without centralized control. This structure minimizes the need for traditional market makers.
Context
Automated markets are a core component of decentralized exchanges and a key innovation in digital asset trading. Their efficiency and accessibility are frequently discussed in crypto news. Debates continue regarding their capital efficiency and potential for impermanent loss for liquidity providers. The evolution of these systems remains a central theme in blockchain development.
TokenWorks' NFTStrategy introduces a novel financial primitive, integrating automated trading and creator rewards to inject deep liquidity into the NFT market.
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