AMM stands for Automated Market Maker. This is an algorithm, often supplemented by oracles, that facilitates the pricing and exchange of assets between users. Assets are exchanged at market value through liquidity pools. These pools are created by Liquidity providers, LPs, who deposit assets to the exchange in pairs. This “asset pair” then allows users to swap one asset for the other through the liquidity pool. Fees are paid to the LPs who provided the liquidity. The more liquidity a pair has the less “slippage” a user experiences, meaning the less likely the user is to experience a price change in their trade.