BXH Automatic Market-Making(AMM) Trading
The automatic market-making trading section (AMM) is one of the core sections of BXH, providing users with low complexity, low gas cost, and decentralized cryptocurrency transactions that do not require off-chain input. Investors can obtain income simply and quickly, while further adding value to their income by provided liquidity.
⚡️Handling Fee Rebate
⚡️Multi-token exposure
⚡️High capital efficiency and low slippage
⚡️ Optimize temporary losses
BXH team continues to explore potential cryptocurrency investment solutions for users on the AMM trading section. the AMM trading section of BXH has different operating mechanisms on the HECO and BSC main chains, allowing users to choose according to their preferences for the different ecologies and investment methods.
What is AMM in crypto world?
An automated market maker (AMM) is the underlying protocol that powers a decentralized exchange (DEX) by enabling assets to be traded by using crypto liquidity pool as counterparties, instead of a traditional market of buyers and sellers.
The protocols use algorithms instead of order books to match buyers and sellers with liquidity.
An automated market maker (AMM) is a tool used to provide liquidity in decentralized finance (DeFi). They are used to enable the automatic trading of digital assets. They do this by using liquidity pools as a replacement for traditional buyer and seller markets
How Do Automated Market Makers Work?
To trade token pairs, automated market makers use formulas., for example, BTC-USDC is a trading token pair. These formulas are referred to as smart contracts, and they help to create a liquid trading market for buyers and sellers. All trading occurs on a peer-to-contract basis, eliminating the need for other traders and market makers to act as counterparties.
AMMs are free of order books and order types. Instead, formulas determine asset prices.
A trade does not require the participation of another party or trader. Instead, you interact directly with the contract, which makes the market for you, thus the term “automated market makers.”
What Is the Importance of AMMs?
AMMs offer a safe and stable way to invest in cryptocurrency, with high returns for liquidity providers. Because they do not require intermediaries, these markets are self-sustaining. Smart contracts are powered by formulas, which provide investors with security and confidence.
Algorithm-driven procedures enable anyone to become a liquidity provider or trade cryptocurrency in a simple and straightforward manner. That is not to say that investing in an AMM is without risk; all forms of investing do.
Advantages of Automated Market Makers (AMM)
Many great advantages of automated market makers revolve around increased investment stability and clarity. Here are some of the most significant benefits of AMMs.
📝Provide liquidity when other traders are unavailable: Because traders, both buyers and sellers, swap assets with a liquidity pool rather than other buyers and sellers.
📝Reduce price manipulation tactics: Because the formula keeps the value of the token pairs constant, traders’ ability to use price manipulation tactics such as wash trading, front running, and others is reduced.
📝Transparency is provided by making on-chain transactions and allowing traders to keep custody of their assets when trading.
