Decentralised Exchange/ AMM

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A Decentralized Exchange (DEX) is a place to exchange assets automatically facilitated by smart contracts.

There are two actors involved;

1. Holders of cryptocurrencies (liquidity providers) renting out their crypto to a pool, and

2. Traders trading using the fund from liquidity providers in the same pool.

This self-sustaining model is powered by automated market-makers (AMMs) known as "liquidity pools".

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