Trading Notes | AMM (Automated Market Maker)
① AMMs don’t require individual orders to be matched. Traders swap between the two tokens in a liquidity pool.
② The more of a token that is bought from the pool, the scarcer it becomes and the higher its price—so large swaps cause greater price impact.
③ When trading on a DEX, set your slippage tolerance carefully. If it’s too high, you could be vulnerable to sandwich attacks and pay a larger price difference.
$UNI 4.994（-13.9%）
① AMMs don’t require individual orders to be matched. Traders swap between the two tokens in a liquidity pool.
② The more of a token that is bought from the pool, the scarcer it becomes and the higher its price—so large swaps cause greater price impact.
③ When trading on a DEX, set your slippage tolerance carefully. If it’s too high, you could be vulnerable to sandwich attacks and pay a larger price difference.
$UNI 4.994（-13.9%）
