What it means
A decentralised exchange built for trading between tokens of similar value, such as two dollar stablecoins.
Its pricing formula keeps the rate very close to one for one while the pool is balanced, so stablecoin swaps cost little.
How it works
Its pools are also used to spot a depeg early.
Related terms
| Term | What it means |
|---|---|
| AMM | Automated market maker: a DEX that prices trades with a formula over a pool of tokens, instead of matching buyers and sellers. |
| DEX | Decentralised exchange: smart contracts that let you trade tokens straight from your own wallet, with no company holding your money. |
| Stablecoin | A token on a blockchain designed to keep a steady value, usually one dollar or one euro, backed by reserves. |
This glossary explains terms in general. It isn't investment, tax or legal advice.